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From Products Liability Law Daily, April 22, 2016

Oregon rejects pump manufacturer’s bare metal defense to liability for injuries linked to asbestos-containing components

By Pamela C. Maloney, J.D.

In deciding a matter of first impression, the Oregon Court of Appeals rejected the bare metal defense, holding that under Oregon’s products liability law, the manufacturer of pumps used aboard U.S. Navy aircraft carriers could be liable for a former seaman’s death from mesothelioma even though the pump manufacturer had not manufactured or sold the replacement gaskets, packing, and insulation to which the decedent had been exposed. Although the decedent had not worked on or around the original gaskets, packing, or insulation that came with the manufacturer’s pumps, the court determined that the pumps around which the decedent had worked were in substantially the same condition as when they were sold to the Navy and that it was foreseeable that seamen would be exposed to asbestos through the replacement gaskets, packing and insulation In addition, the court concluded that there was enough evidence to support the causation element of the estate’s negligence claim (McKenzie v. A. W. Cheston Co., April 20, 2016, Nakamoto, L.).

The decedent, who had been in the Navy for almost 20 years, had served aboard two steam-powered aircraft carriers on which pumps manufactured by A.W. Chesterton Co. had been installed. The decedent’s job duties on the first carrier required him to replace packing inside pumps, to work with and replace gaskets, and to remove and service insulation on the outside of the pumps. All of these duties exposed the decedent to asbestos fibers. Although he was in charge of maintenance and operation of the boiler rooms when he served aboard the second vessel, the decent still spent time providing hands-on help, which again exposed him to asbestos fibers. By the time the decedent served aboard these two vessels, they had undergone extensive pump maintenance, overhaul or repair such that any original asbestos-containing gaskets and packing would have been removed and replaced. Thus, the decedent’s exposure would have been to the asbestos-containing components manufactured by companies other than A.W. Chesterton.

A.W. Chesterton moved for and was granted summary judgment on the decedent’s strict products liability claims, which alleged that the pumps sold by the manufacturer with “asbestos-containing products or products that were used in conjunction with asbestos” were unreasonably dangerous and defective, and that the manufacturer had failed to provide sufficient warnings and/or instructions regarding the harm caused by exposure to asbestos or failed to notify the public of its products’ dangerous propensities. The court also granted summary judgment on the negligence claims, which alleged that the pump manufacturer (1) had distributed or sold asbestos-containing products when it knew, or should have known, about asbestos-related hazards; (2) had failed to conduct adequate testing to determine the level of airborne asbestos fibers emitted by its products; and (3) had failed to provide adequate warnings about the dangers associated with the use of asbestos products and to advise individuals about how and when to use respiratory protection.

Identification of products at issue. The court began its analysis by addressing the threshold inquiry as to what were the final products at the heart of the estate’s claims. The pump manufacturer had argued that the relevant unreasonably dangerous products for the purposes of the strict product liability design defect and failure-to-warn claims were not the pumps, as the estate maintained, but rather were the asbestos-containing gaskets, packing, and insulation. According to the manufacturer, because it manufactured the metal pumps, which did not cause the decedent’s injury, it could not be held strictly liable for any injury caused by the asbestos-containing components. The court rejected the pump manufacturer’s product arguments, agreeing with the estate that under Oregon law, which adopts comment g to Restatement (Second) of Torts §402A, and in accordance with the theory of the estate’s case, the products at issue were the pumps, with the asbestos-containing parts, as sold and delivered to the Navy.

Bare metal defense. In response to the strict products liability claim, the pump manufacturer argued that (1) the bare-metal defense and its focus on component asbestos-containing products was consistent with Oregon precedent and (2) the court should follow courts in several other jurisdictions, such as Washington and California, that accept the bare-metal defense and reject strict liability for a pump manufacturer’s failure to warn pump users that there is a risk from another manufacturer’s asbestos-containing products used with the pump.

The court found no prior case law in Oregon that covered the precise question presented in this case and ruled that the text and context of Oregon’s statutory scheme was inconsistent with the bare metal defense as pleaded by the manufacturer. In addition, the out-of state authorities cited by the pump manufacturer as establishing the bare metal defense either run contrary to the comments in §402A of the Restatement or are derived from the jurisdiction’s own common law, developed without regard to the comments to §402A.

After analyzing the Washington and California cases cited by the pump manufacturer, the Oregon Court of Appeals held that the “no-duty” rules expressed in those decisions contradicted the principle that a seller who foresees harm from use of its product has a duty to warn the user—the principle expressed in comment h to §402A—and, to some degree, they also undermined the policy for statutory strict liability articulated in comment c to §402A. As a result, the Washington and California courts had announced common law rules that favored sellers by changing the duty-to-warn default to a no-duty default when a seller, who knows of the danger to users, sells an unreasonably dangerous product containing dangerous component parts made by others that will be replaced with like dangerous component parts made by others. Based on its analysis, the Oregon court concluded that the bare metal defense did not bar the estate, as a matter of law, from its theory that the pump manufacturer was strictly liable for failing to warn users of the danger of asbestos in the products it had sold to the Navy, i.e., pumps with asbestos-containing gaskets, packing, or insulation included and used with the pumps, because the pumps were expected to, and did, reach the users without substantial change in the condition in which they were sold.

Failure-to-warn claim. The pump manufacturer argued in the alternative that it could not be liable because it was not the seller of an unreasonably dangerous product that caused the decedent’s injury. The court rejected this argument to the extent it was a restated version of the pump manufacturer’s argument that the only unreasonably dangerous products at issue were the asbestos-containing gaskets, packing, and insulation. However, the court was compelled to analyze this argument in light of the estate’s theory of liability for failure to warn. The pump manufacturer acknowledged that the record contained evidence that the Navy strictly required the use of asbestos-containing gaskets, packing, and external insulation for some of the pumps installed on the two aircraft carriers. The court further noted that the estate had produced evidence that the pump manufacturer had every reason to know that the navy, having required the placement of asbestos-containing parts in and on the exterior of the pumps would continue to use those same parts. This evidence was sufficient to support the estate’s theory that the pumps encountered by the decedent were in substantially the same condition as when they were sold to the Navy and that the pump maker expected that the replacement components would continue to contain asbestos. Thus, the manufacturer was not entitled to summary judgment based on its argument that it was not liable for asbestos-continuing products supplied by other manufacturers.

Negligence claims. In response to the estate’s negligence claims, the pump manufacturer again argued that the estate failed to prove a causal link between its conduct and the decedent’s injuries because it did not make or sell the replacement components that the decedent encountered. However, the estate’s theory was that the pump manufacturer knew that the maintenance of the pumps required removal and replacement of these components and that these components would contain asbestos. Therefore, the manufacturer’s failure to warn the decedent of the need for and how to use respiratory protection was the but-for cause of the decedent’s exposure and subsequent illness. Because the pump manufacturer did not argue that the record was devoid of evidence to support the contention that a failure to warn on its part played a part in the decedent’s exposure and subsequent illness, summary judgment on this claim was not warranted.

The court also rejected the pump manufacturer’s bare-metal defense as grounds to grant summary judgment on the estate’s negligence claims for the same reasons explained with respect to the strict liability claim.

The case is No. 166.

Attorneys: James S. Coon (Swanson, Thomas, Coon & Newton) for Paul George McKenzie and Dana Jeunea McKenzie. J. Michael Mattingly (Rizzo Mattingly Bosworth PC) for A.W. Chesterson Co.

Companies: A.W. Chesterson Co.

MainStory: TopStory DefensesLiabilityNews SCLIssuesNews WarningsNews AsbestosNews OregonNews

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