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From Products Liability Law Daily, October 9, 2014

State court finds MDL court misapplied sophisticated user rule in asbestos action

By John W. Scanlan, J.D.

A California trial court should not have found the heirs and family of a deceased shipyard worker were collaterally estopped from bringing suit against an asbestos manufacturer because a federal court had misapplied state law in holding against them in another case, a California appellate court held in an unpublished decision reversing the lower court’s grant of summary judgment to the manufacturer (Gottschall v. Crane Co., October 8, 2014, Richman, J.).

Background. Robert Gottschall worked in various shipyards and other facilities from 1959 to 1989. He subsequently developed mesothelioma and, before he died in 2010, he filed a complaint in California state court against Crane Co. and other companies, alleging that exposure to their products caused his illness. After his death, his heirs and family filed in federal court a wrongful death and survival action raising negligence and strict liability claims against six other defendants not named in the first action; this case was transferred from the Northern District of California to the Eastern District of Pennsylvania as part of multi-district litigation. The MDL court granted summary judgment to defendant General Dynamics Corp., finding that the U.S. Navy was a “sophisticated user” of asbestos-containing materials under California law and that the company was not liable under the sophisticated user defense.

Crane then moved for summary judgment in the California state action. It argued that, like General Dynamics, it had supplied asbestos products to the Navy and moved for summary judgment on the ground that the family and heirs were collaterally estopped from relitigating the sophisticated user issue in the state court due to the federal court decision. The state court agreed, and the family and heirs appealed.

Sophisticated user defense. The grant of summary judgment to Crane was reversed because Crane had not borne its burden of establishing the elements for collateral estoppel, as the federal court had misapplied California law in reaching its decision. The California Supreme Court first recognized the sophisticated user defense in Johnson v. American Standard, Inc., 43 Cal.4th 56 (2008), in which it determined that a trained and certified HVAC technician was a sophisticated user who was expected to understand the potential hazards of a chemical used as a refrigerant. Although the MDL court relied only upon this case, Johnson had no application to the facts of the present case, according to the appellate court, instead citing two post-Johnson appellate court decisions. InStewart v. Union Carbide Corp., 190 Cal.App.4th 23 (2010), the court found that Johnson did not impute an intermediary’s knowledge to the plaintiff or require of him any knowledge except that which had been made available to him in his training or that he should have had as a result of his profession and certification. In Pfeifer v. John Crane, Inc., 220 Cal.App.4th 1270 (2013), the court stated that in cases brought by employees of an intermediary, the issue was their knowledge or potential knowledge, not the intermediary’s sophistication and, as a result, the intermediary’s sophistication did not automatically shield a supplier from liability to an employee of the intermediary. Because the MDL court erroneously applied California law, a California state court was not bound by its decision. The court concluded by noting that this case did not involve a “split” cause of action because the state and federal actions were brought against different defendants.

The case number is A136516.

Attorneys: Richard Martin Grant (Brayton Purcell) for Kimbra Gottschall. Michele Cherie Barnes (K&L Gates) for Crane Co.

Companies: Crane Co.

MainStory: TopStory WarningsNews DefensesLiabilityNews SCLIssuesNews AsbestosNews CaliforniaNews

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