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July 23, 2014 Articles

Is There a Duty to Warn Even the Most Sophisticated User?

By Monica Williams Monroe

The California Supreme Court is currently considering the case of Webb v. Special Electric Co., where two issues on appeal are related to the duty to warn. First is whether a supplier of a component part or raw or bulk material owes a duty to warn the purchaser of that component or material who is a sophisticated user of that part or material. Second is whether the supplier owes the ultimate user or consumer of the subsequently completed product a duty to warn of the potential dangers of the use of that finished product and, if so, whether the sale to the sophisticated user obviates the need or discharges the duty to make any such warning.

The question of what duties a supplier owes and to whom and in what circumstances remains a current hot debate in products liability litigation around the country. This is particularly true when that supplier is selling to purchasers who are sophisticated users and who incorporate the part or material into other products or resell the part or material to others who do so. When selling a part or material to a sophisticated user, should suppliers still be held liable for a duty to warn? With absolutely no control over the manufacturing process and no contact with or connection to the ultimate end user, should suppliers still be held liable for a duty to warn?

In Webb, these issues centered on William Webb's employment as a pipefitter where he claimed exposure to Johns-Manville Transite pipe. The pipe contained asbestos fiber that was allegedly supplied to Johns-Manville by Special Electric. In the lower court, Special Electric argued it had no duty to warn Johns-Manville, a sophisticated user, or the ultimate user or consumer—including the plaintiff, Webb—of any risks, based on the sophisticated user doctrine. The trial court was persuaded and granted judgment notwithstanding the verdict, finding that requiring Special Electric to warn Johns-Manville would be the equivalent of "telling the Pope about Catholicism." Webb v. Special Elec. Co., 153 Cal. Rptr. 3d 882, 889 (Ct. App. 2013). The trial court held that in those circumstances, it would be unreasonable to impose on Special Electric a duty to warn of the alleged dangers of any finished product and likened such duty to "carrying coals to Newcastle." Webb, 153 Cal. Rptr. at 895 (internal quotation marks omitted).

The California Court of Appeal, however, disagreed, reversing the lower decision and finding a duty to warn extended from Special Electric to Johns-Manville and to Webb, even though Johns-Manville was a knowledgeable manufacturer/sophisticated user who stood between both parties, and even though warning the purchaser would be insufficient to warn the ultimate user or consumer. The court recognized, "No one in this appeal doubts that Johns-Manville was a sophisticated user of asbestos, who needed no warning about its dangers." Webb, 153 Cal. Rptr. at 895. But as the dissent points out, the result of majority ruling is "that it can be a tort to fail to tell someone something they already know, and that it can also be a tort to fail to impose on someone a contractual duty to do something they already have a tort duty to do." Webb, 153 Cal. Rptr. at 906 (Rothschild, J., dissenting).

The question of whether a supplier, who has no control over product manufacturing, has a duty to warn, and at what level, raises some issues. From a policy perspective, imposing a duty to warn on a supplier who does not manufacture the ultimate end product sold to consumers can cause many complications. From a practical perspective, imposing a duty to warn the ultimate user or consumer on a supplier of a component part or raw material is difficult, if not impossible, to discharge.

First, when this standard is imposed, suppliers of parts and materials are placed in a position of having to warn of risks of which their buyers (manufacturers) were already aware. A manufacturer, using raw materials to produce finished products, is often even more educated on the risks associated with the use of and manufacturing process for its raw parts and supplies, and certainly is more aware of any details of the finished product into which the parts and supplies are incorporated. Prior California opinions on the sophisticated user defense are instructive on this.

The sophisticated user defense has been held to relieve a manufacturer of the duty to warn an end user who already has the expertise and knowledge regarding any alleged risks or dangers, and similar principles apply to suppliers. As noted in Johnson v. American Standard, Inc., 179 P.3d 905 (Cal. 2008), a duty does not apply when the user one must warn holds the requisite training, knowledge, and expertise to already understand any risks. Thus, per Johnson, it would follow that raw materials suppliers should not owe a duty to their manufacturers who are knowledgeable. There simply is no attributable injury in that case, as was noted in Johnson, when a party fails to warn someone who has by his or her own sophistication already been warned. Likewise, moving further down the supply line, when the manufacturer is sophisticated enough to know of any alleged dangers, that party is significantly better positioned to warn and notify the end user. It is the manufacturer's and not the supplier's failure to warn that would have ultimately caused any alleged harm.

The California Court of Appeals found that Special Electric had a duty to warn, as a matter of law, because it knew that the fiber it was selling was dangerous, and it knew that users, such as Webb, would not have reason to know that it was dangerous. Webb, 153 Cal. Rptr. at 897. But in light of the agreed fact, this holding circumvents the very premise of the sophisticated user doctrine. To support its holding, the Court of Appeals cites the Restatement (Second) of Torts § 402A. However, as pointed out by the dissent, that section deals only with the selling of goods that are expected to reach the ultimate user without substantial change in their condition. In the Webb case, there clearly was an expectation that the asbestos fiber sold as a raw material would be substantially changed as it was later incorporated into a finished product.

Second, in practical application, it may be near impossible for a raw or bulk material supplier to even know how the product manufacturer will use its materials before placing them into the stream of commerce. Although generally several uses for supplied materials may be known, a supplier will not normally control the use of its materials in the buyer's ultimate manufacturing process. As such, even if the supplier could provide a warning, the final use, product, and customer are more likely than not unknown. The imposition of a duty to warn in such a situation places significant operational and financial burdens on a supplier, invoking a standard that a raw materials supplier may never be able to meet. The dissent recognized this issue, noting:

When a manufacturer or distributor has no effective way to convey a product warning to the ultimate consumer, the manufacturer should be permitted to rely on downstream suppliers to provide the warning. "Modern life would be intolerable unless one were permitted to rely to a certain extent on others doing what they normally do, particularly if it is their duty to do so."

Webb, 153 Cal. Rptr. at 908–09 (Rothschild, J., dissenting) (quoting Restatement (Second) of Torts § 388 cmt. n) (internal quotation marks omitted). However, the majority opinion notes that the court is "not called upon to confront whether it would have been difficult or even impossible for Special Electric to effectively warn consumers of its asbestos, as the trial court apparently concluded." In this regard, the dissent further noted that the plaintiffs had conceded at trial and on appeal that Special Electric did not owe a warning directly to Webb, but rather argued that Special Electric should have contractually obligated Johns-Manville to provide warnings on products that incorporated its fiber. Webb, 153 Cal. Rptr. at 907–08 (Rothschild, J., dissenting).

The forthcoming ruling from the California Supreme Court will hopefully be crafted with not only the policy considerations, but also the practical considerations in mind. It will be interesting to see how the California Supreme Court "untangles" this Webb and the legal implications thereof.

Keywords: litigation, products liability, supplier, manufacturer, sophisticated user, end user, duty to warn

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