• California Supreme Court Upholds the “Replacement Part Defense” and Changes the Face of California Asbestos Litigation
  • January 16, 2012 | Authors: Julie R. Evans; Charles W. Jenkins
  • Law Firms: Wilson Elser Moskowitz Edelman & Dicker LLP - New York Office ; Wilson Elser Moskowitz Edelman & Dicker LLP - Los Angeles Office
  • On January 12, 2012, the Supreme Court of California delivered the much anticipated decision in the asbestos replacement part case, Barbara J. O’Neil, et al. v. Crane Co., et al. The Court found that product manufacturers are not liable for injury caused by asbestos-containing external insulation and replacement parts (i.e., packing and gaskets), which the manufacturer did not manufacture, distribute or supply. The Court simply stated:

    We hold that a product manufacturer may not be held liable in strict liability or negligence for harm caused by another manufacturer’s product unless the defendant’s own product contributed substantially to the harm, or the defendant participated substantially in creating a harmful combined use of the products.

    The O’Neil plaintiffs brought a wrongful death action based on negligence and strict liability in the Los Angeles County Superior Court. Plaintiffs sued various defendants, including valve manufacturer Crane Co. and pump manufacturer Warren Pumps, LLC. Plaintiffs contended that Patrick O’Neil (decedent) died after contracting mesothelioma while serving in the U.S. Navy aboard the USS Oriskany. With respect to Crane and Warren (defendants), plaintiffs alleged that decedent was exposed to asbestos from external insulation and internal packing and gaskets associated with the defendants’ valves and pumps. It was undisputed that at the time of his alleged exposure, any external insulation and internal asbestos-containing components had been supplied by third parties and not the defendants.

    At trial, defendants successfully argued that plaintiffs had failed to produce evidence that the decedent was exposed to asbestos from a product they manufactured, distributed or supplied. Defendants’ motions for non-suit were granted with the trial court finding that there was no evidence that defendants’ products were inherently dangerous. The trial court also found that the component parts doctrine shielded them from liability because the Navy integrated their non-defective products into a larger, sophisticated system and defendants lacked control over, and did not participate in, this integration process.

    The Court of Appeal reversed the trial court’s decision, finding that “[A] manufacturer is liable in strict liability for the dangerous components of its products, and for dangerous products with which its product will necessarily be used.” The appellate court found that the defendants’ products were defectively designed “because they required asbestos packing and insulation” (a conclusion the Supreme Court in O’Neil found was not supported by the evidence).

    The California Supreme Court reversed the Court of Appeal’s decision, finding that a product manufacturer is not liable for asbestos exposure caused by external insulation or replacement packing and gaskets manufactured, distributed and supplied by a third party. The Supreme Court discussed at length the role the U.S. Navy played in specifying the equipment to be used in naval vessels, including requiring the use of asbestos-containing insulation and internal packing and gaskets. The Court found no evidence that defendants supplied external insulation and no evidence that the valves and pumps required asbestos-containing internal components to operate. The gaskets in the valves and pumps were replaced during routine maintenance and there was no evidence that decedent was exposed to asbestos from internal components supplied by defendants. The external insulation and internal components were supplied by Navy-approved third-party vendors.

    The California Supreme Court decision echoes the arguments made by the California asbestos defense bar for years - that principles of fairness and public policy do not warrant an extension of liability to a defendant that did not manufacture or supply the injury-causing product. The Supreme Court disagreed with the plaintiffs, finding that manufacturers are not liable even if it is foreseeable that their products would be used in conjunction with another manufacturer’s defective products or replacement parts. The Court stated that “foreseeability of harm, standing alone, is not a sufficient basis for imposing strict liability on the manufacturer of a nondefective product, or one whose arguably defective product does not actually cause harm.” The Court held that the doctrine of strict liability was never intended to impose absolute liability, which would place an excessive and unrealistic burden on product manufacturers who should not be required to insure and warrant against the potential risks involved with another manufacturer’s product.  Rather, the Court noted that “[i]t is fundamental that the imposition of liability requires a showing that the plaintiff’s injuries were caused by an act of the defendant or an instrumentality under the defendant’s control.”

    The Court also rejected the argument that the manufacturers had a duty to warn about dangers that could be present in the products of others.  Specifically, plaintiffs argued that “defendants had a duty to warn O’Neil about the hazards of asbestos because the release of asbestos dust from surrounding products was a foreseeable consequence of maintenance work on defendants’ pumps and valves.”  The Court rebuffed this claim, finding:

    Generally speaking, manufacturers have a duty to warn consumers about the hazards inherent in their products. The requirement’s purpose is to inform consumers about a product’s hazards and faults of which they are unaware, so that they can refrain from using the product altogether or evade the danger by careful use. Typically, under California law, we hold manufacturers strictly liable for injuries caused by their failure to warn of dangers that were known to the scientific community at the time they manufactured and distributed their product. However, we have never held that a manufacturer’s duty to warn extends to hazards arising exclusively from other manufacturers’ products. A line of Court of Appeal cases holds instead that the duty to warn is limited to risks arising from the manufacturer’s own product. 

    * * *

    [N]o case law ... supports the idea that a manufacturer, after selling a completed product to a purchaser, remains under a duty to warn the purchaser of potentially defective additional pieces of equipment that the purchaser may or may not use to complement the product bought from the manufacturer. [Citations omitted.]

    The O’Neil decision is expected to have an impact on California asbestos litigation.  Since plaintiffs will no longer be able to claim that solvent defendants of original equipment are responsible for the exposure of unknown or insolvent third-party replacement part manufacturers, it can be anticipated that there will be a decline in cases involving plaintiffs who worked on naval vessels. As California is a friendly venue for plaintiffs in asbestos litigation, however, we expect that the asbestos plaintiffs’ bar will adjust to this ruling and focus on other alternative avenues of recovery.