Is a Military Contractor Liable for Asbestos Added to, and Also Integral to, Its Product?
Is a Military Contractor Liable for Asbestos Added to, and Also Integral to, Its Product?
This case pits the surviving spouses and estates of two naval sailors against military contractors who manufactured and supplied shipboard equipment. The plaintiffs/respondents allege that both sailors, John DeVries and Kenneth McAfee, were injured by asbestos-containing materials added to the defendants/petitioners’ equipment after it was delivered to the Navy. Petitioners say they did not make, sell, or deliver the later-added materials and the machines were “bare metal” when sold. Respondents argue that the machines incorporated asbestos parts and could not work without those parts and that petitioners had a duty to warn about the risks associated with third-party asbestos. Petitioners originally won both cases on summary judgment but after an appeal and a remand, the Third Circuit reversed.
Air and Liquid Systems Corp. v. Devries
Docket No. 17-1104
Argument Date: October 10, 2018
From: The Third Circuit
by Barbara L. Jones
Are petitioners liable under maritime law for injuries caused by asbestos that was required to be added for the proper use and maintenance of their products after the sale to the Navy?
John DeVries served aboard the USS Turner as an engineer from 1957 to 1960. Foster Wheeler, Westinghouse (CBS’s predecessor in interest) and Buffalo Pumps (Air & Liquid Systems’ predecessor in interest) supplied parts for the ship. The Navy added asbestos post-sales to the supplied equipment. DeVries developed cancer. He and his wife claimed that exposure to the asbestos caused his illness.
Kenneth McAfee served on the USS Wanamassa and the USS Commodore from the late 1970s to the early 1980s. Ingersoll manufactured the compressors for both ships. McAfee also subsequently developed cancer. McAfee and his wife alleged that his cancer was caused by asbestos that the Navy added to the compressors after buying them.
Respondents sued the companies who made equipment to which the Navy later added asbestos, claiming that petitioners had a duty to warn about the third-party asbestos-containing insulation and replacement parts added to their products post-sale, and that they subsequently breached that duty.
At issue is what is known as the bare-metal doctrine, which arguably applies here because the original products were delivered without insulation, per the Navy’s instructions. The bare-metal rule says that equipment manufacturers are not liable for injuries caused by asbestos products if the asbestos is added to the equipment by a third party post-sale. Rather than eliminate a source of relief for sailors, the Third Circuit based its approach to liability on the foreseeability of the use of asbestos.
On this appeal from summary judgment, some factual disputes are unresolved.
Respondents dispute the claim that the petitioners’ machines were “bare metal,” arguing that the machines incorporated asbestos parts and could not work without them. Some of the equipment did originally include asbestos-containing parts, but petitioners contend those parts had worn out before either of the men were on the ships.
The district court granted summary judgment to petitioners, but after two appeals, the Third Circuit reversed. It said that the issue was whether the men’s injuries were reasonably foreseeable, since foreseeability is an element both of duty and of proximate causation. The Third Circuit took the approach that some asbestos-caused injuries are “reasonably foreseeable” to those who do not supply the asbestos, because this approach would promote the concern within maritime law to protect sailors. The appeals court said that future liability questions would have to be decided on a case-by-case basis and remanded this case to the district court. The four petitioners appealed.
This case arises under general maritime law, which petitioners define as an amalgam of traditional common-law rules, modifications of those rules, and newly created rules. The common law and maritime law both require reversal, petitioners say.
Tort law generally limits liability to those within a product’s chain of distribution for two reasons, petitioners say. The first is that defendants have no duty to protect the public from third parties, even if danger is foreseeable. The second is that the defendant’s wrongdoing must be directly connected to the plaintiff’s injury. That connection is missing when third parties make, supply, and sell the injury-causing product, petitioners assert.
“When asbestos is added to [bare-metal] equipment post-sale, either as insulation or in the form of a replacement part, the equipment manufacturer’s connection to the asbestos is the foreseeability of its use. [T]hat is not enough to justify tort liability,” they continue. “Products liability law is built upon the least-cost avoider rationale; it ‘fixes responsibility’ for injuries caused by defective products ‘wherever it will most effectively reduce the hazards to life and health inherent in defective products that reach the market.’ (Citation omitted.) That rationale justifies limiting liability to those within the chain of distribution,” petitioners argue.
Furthermore, petitioners note, on a ship most things are connected to other things, and if foreseeability was the only criteria, overwarning would result, sailors might ignore the warnings, and the price of equipment would rise without an offsetting gain in safety.
Another way to look at the petitioners’ arguments is one of causation. The attenuated nature of the causal connection between the respondents and the alleged injuries is particularly stark, petitioners assert. “[B]etween the [Respondents’] actions and the injury-causing event stand countless independent decisions by other actors: the decisions by third parties to make, sell and supply asbestos-containing insulation and replacement parts, the Navy’s decisions to continue asbestos, the Navy’s decision to address the risks of asbestos through training rather than through labeling or warnings, and so on,” they argue.
The principles of maritime law do not dictate modifying the common-law rule, petitioners continue. On the contrary, the law limiting liability to those inside a product’s chain of distribution fully accords with maritime law’s traditions of simplicity and practicality. The rule’s predictable results will lead to uniformity in the law, they contend. A contrary law would not promote maritime commerce.
The Supreme Court and the Third Circuit should not promote or expand this approach to promote the welfare of seamen, petitioners continue. The relevant question should be from whom seamen recover, they say, pointing out that there are “asbestos trusts” in bankruptcy courts for this very purpose.
Maritime precedent says that the “real” product at issue here is the petitioners’ entire integrated product sold to its customer: the working machinery with its asbestos parts, spare asbestos parts, and the accompanying maintenance manual, respondents assert. “A manufacturer’s duty to warn of the foreseeable hazards arising from use of its products is one of the most basic tenets of maritime law and tort law. This tenet applies to situations where a manufacturer knowingly incorporates and requires the use of a dangerous component-part in its product,” respondents argue.
The respondents’ “Counter Statement of the Case” says that the machines supplied to the Navy required asbestos parts to function and their manuals required routine maintenance that exposed users to asbestos dust, but did not warn of the hazards. They say that the petitioners, not the Navy, designed the machines to require the use of asbestos parts and replacement asbestos parts. Respondents also say that the petitioners knew about the potential asbestos liability because they insured against it and criticize the petitioners’ “blame the Navy approach.”
Both maritime precedent and doctrine support the Third Circuit’s opinion, respondents say. The Court has previously held that maritime negligence defendants are held to a duty of reasonable care under the circumstances of each case that is also bound by the requirement of foreseeability.
The Third Circuit applied a balanced rule, finding a duty only when an asbestos component was essential or inevitable such that the defendant was responsible for introducing asbestos into the environment at issue, respondents continue. This is consistent with both tort law and maritime law, and also with the law in the majority of state court cases. It is also consistent with traditional tort doctrine, which says a manufacturer has a duty to warn of the hazards arising from the intended and expected use of its product, even when the harm involves a part manufactured by a third party. “Petitioners designed their machinery to require asbestos parts, profited from the sale of this integrated machinery, and passed on to their customers the cost of insurance for future harms arising from [the] use of their machines,” respondents argue. Departing from the Third Circuit’s rule would unfairly concentrate liability on those who did not supply the machines that required the use of asbestos parts, they note.
Respondents also argue that petitioners are the best parties in the first place to avoid the loss caused by asbestos.
Furthermore, “[a]pplying petitioners’ exception to maritime negligence law by eliminating foreseeability and isolating one component of their otherwise integrated machines would defeat maritime law’s goals of uniformity and simplicity.”
The Third Circuit’s “inevitability” test provides clear guidelines, respondents contend. “Petitioners’ contention that this Court should abandon the concept of foreseeability in negligence law would upend a century of this Court’s jurisprudence and create chaos across every area of maritime law in which principles of negligence, proximate cause (including superseding cause), and foreseeability are routinely applied by the courts,” they conclude.
The economic consequences to either side in this case are obvious. The long-term effects of the case are less so, particularly if it is later deemed applicable only in maritime cases. But even if the outcome is confined to maritime law, those are consequential cases involving potentially huge amounts of money.
The case involves principles of maritime law, such as solicitude for sailors, and also the common law of products liability. Petitioners say that maritime law should not modify the common law in this instance. Respondents say that the Third Circuit relied on the “humane and liberal character” of general maritime law that obliges courts to give rather than withhold a remedy. Both sides rely on cases from land and sea.
The amici Chamber of Commerce and other business groups differentiate between maritime tort cases and non-maritime tort cases. The question of foreseeability bypasses the question of whether the defendants in bare-metal cases owe a duty, they argue. They argue that the defendants do not owe such a duty and the Third Circuit erred by saying the case should go to a fact-finder, and abdicated its role as a common-law court that restrains on tort liability.
Amici’s bottom line: “Common law courts have an important role to play in ensuring that the law develops in reasonable ways; their job is not to simply punt novel issues to the jury and hope for the best.” While no court would accept its role as punter, amici makes a case that the maritime context of this case limits it to maritime cases and common law courts.
The American Association for Justice (AAJ), consisting mostly of plaintiffs’ tort and consumer protection lawyers, collapses the distinction in this case between general negligence and products liability law and maritime law. “Manufacturer liability for negligently failing to warn of dangers to users presented by installation or replacement of an integral component after the product’s delivery to the purchaser falls well within common-law tort and product liability principles. Such a cause of action should therefore be recognized under federal maritime law,” the association argues.
It also says that the Third Circuit is consistent with tort law in limiting liability to situations where the add-on asbestos is an integral component of the machinery.
Although the AAJ does not abandon the trope that the courts owe special solicitude to sailors, the bulk of its argument is not confined to maritime law.
A group of business organizations including the Coalition for Litigation Justice does not restrict its concerns to maritime cases. “Amici are concerned that if the Court holds product manufacturers liable for harms caused by other manufacturers’ asbestos-containing products, the decision will unduly pressure the remaining solvent defendants in the asbestos litigation, including small businesses. The four-decades-old asbestos litigation has already bankrupted over 120 companies and shows no sign of abating. A duty finding would also open the door to lawsuits against countless companies whose products are used with other potentially hazardous products sold by third parties. Finally, other courts may be guided by the Court’s decision when deciding similar cases under state common law.”
The economic basis for assigning negligence liability is identical in this maritime case as in other products liability cases, other amici argue.
For example, Professor Richard Epstein writes, “Where dangerous products change hands, the challenge is to find an efficient but general way to describe what each party is entitled to expect of the other, and when liability will attach to that party’s actions. The way to approach the problem is to ask, in this sequential game, which steps taken by each party will minimize the harm suffered by society. In that way, the parties will organize their conduct most efficiently.”
Similarly, the Products Liability Advisory Counsel argues, “In establishing what amounts to the federal common law of admiralty, this Court looks to the common law experience of the fifty states that addressed the same, or similar, legal issues. In this case, the vast majority of states adhere to the fundamental policy that motivated the creation of product liability in the first place—that manufacturers and sellers profiting from product marketing should also assume responsibility for the harm caused by the products they sell.”
Although the unique character of maritime law, particularly its solicitude for sailors, makes this case unusual, the arguments of both sides and amici seem to imply that the effect of the case may not be limited to the high seas.
Barbara L. Jones is an attorney and editor of Minnesota Lawyer newspaper. She can be reached at 651.587.7803 or email@example.com.
PREVIEW of United States Supreme Court Cases 46, no. 1 (October 1, 2018): 37–40. © 2018 American Bar Association
For Petitioners Air and Liquid Systems Corp., et al. (Shay Dvoretzky, 202.879.3939)
For Respondents Roberta G. DeVries, Individually and as Administratrix of the Estate of John B. DeVries, Deceased, et al. (Richard Phillips Myers, 215.735.9200)
The Chamber of Commerce of the United States of America (Jeffrey S. Bucholtz, 202.737.0500)
Coalition for Litigation Justice, Inc., et al.(Mark Alan Behrens, 202.783.8400)
Product Liability Advisory Council, Inc. (James M. Beck, 215.851.8100)
Richard A. Epstein (Nevin Merrill Gewertz, 312.494.4400)
American Association for Justice (Jeffrey Robert White, 202.944.2839)
Evelyn Hutchins, Flora Everett, James T. McAllister (Lisa White Shirley, 214.722.5990)
Multiple Veterans Organizations (Christian Hancock Hartley, 314.241.2003)
Port Ministries International (Michael F. Sturley, 512.232.1350)