• Appeals Court Creates Anticipated Showdown in the California Supreme Court on Replacement Parts Liability
  • October 26, 2009 | Author: Craig T. Liljestrand
  • Law Firm: Hinshaw & Culbertson LLP - Chicago Office
  • O’Neil v. Crane Co., et al., No. B208225 (Cal. Ct. App., 2d App. Dist.) (Sept. 18, 2009)

    In direct contrast to an earlier decision, the California Court of Appeals, Second Appellate District, recently held that pump and valve manufacturers on board navy ships may face liability for injury caused by asbestos-containing packing and insulation used in conjunction with their products.

    The Second Appellate District ignored and even criticized a similar ruling decided by the California First Appellate District only a few months earlier, which provided navy pump and valve manufacturers with liability protection if: (1) the product component itself was not defective when it left the manufacturer; (2) or the defective product replacement part incorporated into their product was manufactured by others. See Taylor v. Elliott Turbomachinery Co., 171 Cal.App.4th 564 (2009). The O’Neil court held that neither of these principles applies under California law to manufacturers that made pumps and valves designed to be used with asbestos-containing parts.

    Patrick O’Neil was 62-years-old when he died from mesothelioma. The evidence at trial showed that he was exposed to multiple sources of asbestos, including pumps and valves, when he served in the U.S. Navy aboard the USS Oriskany between June 1965 and August 1966. O’Neil’s navy job duties included standing watch in the boiler and engine rooms where he supervised the maintenance and repairs of various equipment. He also supervised repairs when the ship was in dry dock for a few months. The evidence further revealed that Crane Co. manufactured most of the asbestos-containing valves located all over the ship. Of the several hundred pumps on board the USS Oriskany, Warren Pumps manufactured 52; all but a few of the Warren pumps were located in O’Neil’s work area.

    The valves and pumps were covered with an asbestos lagging/insulation, and on the inside, the pumps and valves contained asbestos packing and/or gaskets. The packing and insulation were replaced during normal maintenance activities, which according to fellow shipmates, created large amounts of asbestos dust.

    Both Crane and Warren moved to dismiss the case on the basis that there was no evidence of exposure to their products, and that their respective products were not a substantial factor in causing Mr. O’Neil’s asbestos-related disease. Although neither motion was based on the component parts defense, the court granted defendants’ motions on that ground. The court further noted that neither the pumps nor the valves were dangerous or defective, and that “the release of asbestos was not caused by the normal use of the equipment but by maintenance which was under the supervision of the Navy.”

    Component Parts
    First addressing the component parts defense, the court stated, “[W]e cannot see that [Crane’s and Warren’s] pumps and valves are component parts under this body of law. Here, in contrast, [Crane and Warren] did not supply a building block material, dangerous only when incorporated into a final product over which they had no control. Instead, [Crane and Warren] made separate products with a specific purpose and use. The products were not fungible or multiuse, and were not designed to be altered by [defendants’] customers. Instead, they were used as they were designed to be used, with asbestos insulation and packing which would have to be removed during routine repair and maintenance. Further, unlike the manufacturers in the component parts cases, who had no interaction with the user of the finished product, and no ability to warn, [Crane and Warren] supplied manuals with their products. They had the ability to warn the users of their products.” The O’Neil court further noted that, “[w]e also disagree with the finding that the entire steam system of an aircraft carrier (or . . . the ship itself) is a finished product as that term is used in the context of the component parts defense. Such a broad definition would make the analysis unworkable.”

    Another Manufacturer’s Product
    The court next addressed defendants’ argument that O’Neil was allegedly exposed to asbestos from only asbestos replacement packing and insulation manufactured by others, not originally supplied by Crane and Warren with their pumps and valves. Noting black letter California law that a manufacturer is liable in strict liability for defective components made by others that are incorporated into their products, the court held that both Crane and Warren “incorporated asbestos-containing products into their own products in order to function.” Distinguishing a long line of precedent that insulated manufacturers from liability caused by someone else’s product, the court here ruled that Crane and Warren “incorporated asbestos-containing products into their own products, which needed the asbestos-containing products in order to function.” “The injury was caused by the operation of [Crane and Warren’s] products with replacement products which had the same dangerous propensities as the original parts.” The O’Neil court even went as far as to criticize the Taylor decision, because that case did not seem to distinguish between injury caused by the original packing and injury caused by the replacement packing.

    With two competing appellate decisions on asbestos replacement parts liability, it should not be long before the California Supreme Court is asked to finally set this issue straight. In the meantime, equipment companies, such as pump and valve manufacturers, will simply have to take a wait and see approach on this litigation and hope the California Supreme Court sees the logic and sound reasoning in the Taylor decision.