Asbestos Alert: A Navy Ship is Not A Product Under Maritime Law: MDL Judge Rules on Sophisticated User/Purchaser Defense and Strict Liability

by Low, Ball & Lynch
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[author: Guy W. Stilson]

Mack v. General Electric Co., et al
U.S.D.C., ED Pennsylvania, Action #2:10-78940-ER, (October 3, 2012)
MDL No. 875, _____ F. Supp.2d _____

Deciding two issues of first impression, Judge Eduardo C. Robreno, Jr., who presides over the thousands of cases in the Multi-District Litigation or MDL (the federal court assigned to deal with all asbestos personal injury and wrongful death claims which are subject to federal jurisdiction), has ruled on the Sophisticated User/Purchaser Defense and held that a Navy ship is not a “product” for purposes of strict product liability.

Technically, the Mack decision is merely a memorandum opinion by a federal district judge – a trial court judge – and has no more precedential value than a trial court ruling in state court. But the reality is that federal district court opinions are often cited as persuasive authority in arguments and appellate court opinions and are given weight by most judges. Furthermore, Judge Robreno, through his handling of the MDL for many years, has become an exceptionally well-known and respected jurist with regard to asbestos litigation. His opinion on asbestos-related issues matters to other judges and courts.

Plaintiff James Mack alleged that he was exposed to asbestos aboard various Navy ships during the 1960s and 1970s, while employed by the Department of Defense as a welder. He alleged negligence and strict product liability claims. Defendants were shipbuilders who moved for partial summary judgment (the federal equivalent to a motion for summary adjudication of issues) on the basis of the Sophisticated User/Purchaser theory and on the ground that the ships they built should not be considered “products” for purposes of strict product liability analysis. The court rejected these defendants’ arguments regarding the Sophisticated User/Purchaser theory but agreed regarding the product liability defense, summarily disposing of the strict product liability claims against these defendants but leaving the negligence claims intact.

Applicability of Maritime Law

In reaching its decision here, the court’s first task was to determine applicable law. The action was originally filed in the Northern District of California, and there was a question as to whether California law should apply.

The court determined that maritime law had to govern this case because the case satisfied two separate tests: the “locality” test and the “connection” test. “Locality” is satisfied when the tort occurs on navigable waters or, for injuries suffered on land, when the injury is caused by a vessel on navigable waters. The court pointed out that work performed aboard a ship that is docked at the shipyard or while the ship is in dry dock is considered to have been performed on navigable waters. The court further pointed out that where the plaintiff’s work is performed partially on land and partially aboard a ship on navigable waters, “the locality test is satisfied as long as some portion of the asbestos exposure occurred on a vessel on navigable waters.” As Mack performed at least some of his welding on each defendant’s ship on navigable waters, the court found that the locality test had been satisfied.

As to the “connection” test, this was satisfied because Mack’s work was primarily sea-based during his asbestos exposure: it was “undisputed that the alleged exposure pertinent to Defendants occurred during Plaintiff’s work as a welder aboard various ships.” Had Mack’s exposure been primarily land-based, then the connection test would not have been satisfied. The court further explained that the connection test requires that the incident could have a potentially disruptive impact on maritime commerce and that the general character of the activity giving rise to the incident must show a substantial relationship to traditional maritime activity.

The Sophisticated User/Purchaser Defense

In a nutshell, the Sophisticated User defense is a claim by defendants that they should not be held liable for failure to warn if the user or purchaser of their product is sufficiently sophisticated that he or she should know the dangers of the product. In Mack, Judge Robreno distinguished between the situation where the actual end user is sophisticated, which he refers to as a Sophisticated User situation, and where the purchaser or other intermediary is sophisticated but the ultimate user is not, which he refers to as a Sophisticated Purchaser situation.

Judge Robreno found that maritime law recognizes a Sophisticated User defense, but not a Sophisticated Purchaser defense. He specifically held that a Sophisticated User “is an end user who either knew or belonged to a class of users who, by virtue of training, education, or employment could reasonably be expected to know of the hazards of the product at issue.” Finding that the defendants had presented no evidence that Mack had, or was a member of a group that had, the requisite level of sophistication, the court denied partial summary judgment on the negligence claims.

A Navy Ship is Not a Product Under Maritime Law

The court then turned to the issue of whether a Navy ship constitutes a product for product liability purposes. The court noted that maritime law seeks to promote maritime commerce and to protect those working at sea, and that strict liability seeks to place the burden of preventing harm on the party best able to prevent the harm. With these ideals in mind, the court concluded that “the entities best able to protect sea-bound workers and to bear the burden of preventing harm to those workers … are the manufacturers of the various products aboard the ship,” and that “to impose upon a Navy shipbuilder potential liability for each of the thousands (if not tens of thousands) of products assembled in a Navy ship pursuant to Navy specifications would be an undue, unmanageable, and cumulative burden likely to discourage the activity of shipbuilding.” Further supporting this conclusion, the court noted that the entity most knowledgeable about, and with the greatest control over, a given product is the manufacturer of the product, not the shipbuilder; and that the role of a builder of Navy ships is more like that of a service provider than a manufacturer or supplier of a product, because the shipbuilder simply assembles the components specified by the Navy. The court did make an effort to distinguish its holding from those of other courts which involved ships that had been designed by the shipbuilder and were ultimately found to be products for product liability purposes.

COMMENT AND EVALUATION

While defendants will find it helpful that Judge Robreno has acknowledged a Sophisticated User defense, the defense is narrow. Practical experience has shown that it is usually quite difficult to demonstrate that a particular end user had or was a member of a group that had training, education or employment such that the end user could reasonably be expected to know the hazards of a particular product, particularly where the product contained asbestos. Furthermore, such claims almost always involve issues of fact and are therefore not appropriate for summary disposition.

Nonetheless, we believe this is an extremely helpful decision for defendants who manufactured Navy ships and operated Navy shipyards. “Navy cases,” where the allegations include significant exposure to Navy personnel or Department of Defense contractors, are among the more common types of asbestos cases filed, and usually include one or more builders of Navy ships as defendants.

When it is shown that a ship was a Navy ship and therefore designed to the Navy’s specifications, and that the shipbuilder’s liability is premised upon activity that took place primarily on the ship (even if it was docked or in dry dock), then the shipbuilder should be able to defeat a claim of strict product liability in the MDL.

Judge Robreno’s decision also discussed why maritime law should be applied to such situations rather than state law, under which boats and ships may traditionally be considered products. Accordingly, this opinion should be useful not just for shipbuilder defendants but for any defendant that prefers the application of maritime law, even in cases venued in California and other state courts.

For a complete copy of the Mack opinion, click here.


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Low, Ball & Lynch’s Environmental and Toxic Torts Team has been successfully representing defendants in asbestos-related litigation for over 25 years. The Environmental and Toxic Torts Team also handles cases involving chemical spills and toxicity, lead, silica, and Proposition 65.

Contact us: Sonja Blomquist, sblomquist@lowball.com and Guy Stilson, gstilson@lowball.com | Phone: 415.981.6630 | Fax: 415.399.1506

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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