"Third View" of Bare Metal Defense in Asbestos Litigation Further Complicates Applicability

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The United States District Court for the Eastern District of Louisiana recently issued an opinion in Bell v. Foster Wheeler Energy Corp., CV-15-6394, Africk, L., 2016 U.S. Dist. LEXIS 137547 (E.D. La. Oct. 4, 2016) that enunciates what it calls a “third view” on the so-called “bare metal defense” for asbestos litigation. This “third view” introduces further uncertainty into the ever-changing landscape of the “bare metal defense” and would require additional analysis to evaluate the defense’s applicability to a manufacturer as opposed to the two views that previously existed within the split of authority.  

Split of Authority Prior to Bell Decision

In Bell, the plaintiff is a former U.S. Navy engineman, machinery repairman and machinist mate and the court analyzed the case under maritime law. Ten defendants filed a motion for summary judgment seeking to avoid liability on the basis of the “bare metal defense.” As the court noted in its decision, there is a split in authority among the various circuits and also within the states as to the proper application of this defense. The “bare metal defense” generally makes it more difficult for a plaintiff to prove causation where the alleged asbestos exposure was from a component part for which the manufacturer is not directly responsible. The Bell court noted that where the “bare metal defense” applies, a manufacturer cannot be held liable unless it made, sold, or otherwise controlled the asbestos fibers that caused injury. The law does not impose a duty upon a manufacturer to warn about any product that is not its own. That view is held by the Sixth Circuit and other courts following its rationale. Alternatively, the court cited to the Northern District of Illinois’ decision in Quirin v. Lorillard Tobacco Co. for the proposition that a manufacturer has a duty to warn regarding asbestos under maritime law when “the defendant manufactured a product that, by necessity, contained asbestos components, where the asbestos-containing material was essential to the proper functioning of the defendant’s product, and where the asbestos-containing material would necessarily be replaced by other asbestos-containing material, whether supplied by the original manufacturer or someone else.” 17 F. Supp. 3d 760, 769-70 (N.D. Ill. 2014). The Bell court also noted a growing trend in state law that recognizes exceptions to the general “bare metal defense” under certain limited circumstances, similar to the view expressed in Quirin.  

The “Third View” Proposed by Bell

Ultimately, the court in Bell rejected both theories and found flaws in the approach proposed by both the defendants and plaintiff. In rejecting the defendant’s proposed standard, the court held that “[e]ven if defendants do not have a duty to warn arising out of merely manufacturing a particular product that might be used with asbestos, they can nonetheless have duties arising out of taking the additional action of negligently recommending that a plaintiff use asbestos in conjunction with the manufacturer’s products.” Bell, 2016 U.S. Dist. LEXIS 137547 at *13. The court found plaintiff’s proposed standard equally unpersuasive and held that “imposing plaintiff’s proposed duty to warn would have had the effect of reading the long-recognized general rule that ‘component sellers should not be liable when the component itself is not defective’ entirely out of products liability law” and instead found that before imposing liability, “the Court will require plaintiffs to show that defendants did something beyond merely manufacturing a product that might foreseeably be used with asbestos.” Bell, 2016 U.S. Dist. LEXIS 137547 at *14-15.

In its explanation as to why its so-called “third view” should apply, the court discussed the concepts of component parts liability and the distinction between a manufacturer’s liability for negligence and strict liability. Accordingly, the court laid out a set of standards applicable to a variety of different circumstances and concluded that “it is not appropriate to simply base a manufacturer’s liability on the fact that it is necessary to use asbestos in conjunction with the manufacturer’s product.” Bell, 2016 U.S. Dist. LEXIS 137547 at *19. Under this “third view,” the court will “take into account whether the manufacturer included asbestos components in the original product and, if not, the extent to which the component part manufacturer either (1) was involved in the design of the broader product, or (2) negligently entrusted its component to an incompetent assembler.” Bell, 2016 U.S. Dist. LEXIS 137547 at *19-20. Additionally, the court held that “the standard should also take into account whether the manufacturer recommended a customer use asbestos in conjunction with the manufacturer’s product.” Bell, 2016 U.S. Dist. LEXIS 137547 at *20.  

Analyzing Cases Under Bell’s “Third View” Standard

The court’s “third view” separated the analysis into two primary categories: (a) liability of manufacturer that incorporates asbestos into its finished product, and (b) liability of a bare metal component part manufacturer.  In category (a), the extent of the manufacturer’s liability turns on “whether the harm was caused by a component added by the manufacturer or an aftermarket component added by the user.” Bell, 2016 U.S. Dist. LEXIS 137547 at *21. Not surprisingly, the court held that if the harm is caused by an asbestos component added to the product by the manufacturer, then the manufacturer can be held liable in both strict liability and negligence. However, if the harm was caused by an aftermarket component added to the product, the manufacturer cannot be held strictly liable but may be held liable for negligence if a breach of the duty to warn regarding the original asbestos components that the manufacturer added to the product was a proximate cause of a later harmful exposure to asbestos from an aftermarket replacement part. Additionally, the manufacturer can be held liable for negligence if it negligently recommended the use of a defective aftermarket part. Bell, 2016 U.S. Dist. LEXIS 137547 at *23-24.

Alternatively, where category (b) applies, “the manufacturer’s liability turns on whether the manufacturer did something beyond manufacturing the component part that was used in conjunction with the asbestos.” Pursuant to the component parts doctrine, if a component part manufacturer merely designs the component to its buyer’s specifications, the manufacturer faces no liability unless the component part itself is defective. However, if the component part manufacturer goes beyond that and was substantially involved in the integration of the component part into the design of the finished product, the manufacturer could be held liable in both negligence and strict liability if that integration results in a defective product that harms the plaintiff. Additionally, the component part manufacturer can be held liable for negligence if it supplies a component part that it knows or has reason to know will be used in a manner involving unreasonable risk of physical harm or if it recommends the use of a hazardous part in conjunction with the manufacturer’s component part. Bell, 2016 U.S. Dist. LEXIS 137547 at *28-29.

If this “third view” proposed by the court in Bell is more widely adopted, it will require parties to conduct a threshold analysis of the issues to determine which standard to apply. Therefore, rather than a clear rule whereby the parties can evaluate liability based on a set of defined principles, the parties will be forced to argue over which standard to apply, and then argue for why the defendant is or is not liable under that proposed standard. Such an approach could lead to the unworkable position where the parties cannot even address the merits of the defense because there is disagreement as to the precise applicability of the defense at the outset and the scope of the standards to be applied. 

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.

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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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