Duty to Warn Exists for Manufacturer of Products Required to be Used With Third Party Asbestos-Containing Products New York Court of Appeals, June 28, 2016

Matter of New York City Asbestos Litigation (Dummitt v A.W. Chesterton, et al.), June 28, 2016

The plaintiff, Doris Kay Dummitt, filed suit in the New York Supreme Court, alleging her husband, Ronald Dummitt, was diagnosed with and passed away from mesothelioma from asbestos exposure as a result of work as a Navy boiler technician from 1960 to 1977. Plaintiff commenced this negligence and strict liability claim against Crane Co. and various other defendants who manufactured asbestos-containing gaskets, packing and insulation. In the course of his duties in maintaining naval steam pipe systems, Dummitt worked on Crane’s valves, on which were installed asbestos-based gaskets, packing and insulation. Those asbestos-bearing products were designed and manufactured by companies other than Crane. The plaintiff alleged that, because those components contained friable asbestos, the routine replacement process, which Dummitt completed numerous times, exposed him to carcinogenic asbestos dust.

The plaintiff’s allegations include that, although the record shows Crane’s valves did not contain asbestos or other hazardous materials, Crane’s valves could not practically function in a high-pressure, high-temperature steam pipe system without gaskets, insulation and packing for the valve stems. The plaintiff argues, as Crane knew, because the high temperatures and pressures in the steam pipe systems at issue caused asbestos-based gaskets and packing to wear out, Crane’s customers, including the Navy, had to replace those components with similar ones. Thus, during the period in which Crane sold these valves and related parts, the company marketed a material called “Cranite,” an asbestos-based sheet material that could be used to produce replacements for the asbestos-containing gaskets and packing originally sold with Crane’s valves. In catalogs issued between 1923 and 1962, Crane recommended Cranite gaskets, packing and insulation for use in high-temperature, high-pressure steam services. The catalogs noted that gaskets and packing composed of other materials were available. The catalogs did not indicate the temperature or pressure ratings for some of those alternative products, and it rated others only for low-temperature services, low-pressure services or both. Plaintiff also provided that, during this time, the Navy revised a manual entitled “Naval Machinery.” The revised manual specified that Navy employees should install asbestos-based gaskets on the relevant valves on Navy ships. The manual further noted that insulation generally was essential to economical operation of a ship’s steam pipe systems, and the manual included diagrams of the attachment of asbestos-based gaskets, packing and insulation to valves of the kind supplied by Crane. In the acknowledgments section, the manual stated that “valuable assistance” in the revision of the manual “was rendered by the manufacturers named herewith. The manual listed Crane among the manufacturers who assisted in the revision.

Accordingly, the plaintiff argues that Crane had “acted negligently in failing to warn Dummitt of the hazards of asbestos exposure for the components used with its valves, and that such negligence was a proximate cause of his injuries.”

The Supreme Court of New York granted Plaintiff an accelerated trial preference under CPLR 3403 and consolidated the case with, among others, Matter of New York City Asbestos Litigation (Konstantin v 630 Third Avenue Associates). During the joint jury trial, Crane Co. called Admiral David Putnam Sargent as an expert in Navy procurement practices. Admiral Sargent, who had worked on procurement starting in 1988, testified about Navy specifications for both valves and gaskets. Admiral Sargent testified that, generally, valve manufactures (i.e. Crane Co.), have no role in determining whether, and with what materials, the Navy will choose to insulate the valves after the Navy has received them. When Crane sought to elicit Admiral Sargent’s opinion as to whether Navy practices and specifications at the time of Dummitt’s exposure to asbestos would have prevented warnings about the perils of asbestos dust released by the valves and sealing parts from reaching Dummitt, plaintiff objected, and the court sustained the objection on the ground that Admiral Sargent’s proposed testimony was speculative.

At the conclusion of the trial, Crane moved for a directed verdict, putting forth two main arguments; (1) the plaintiff had failed to present legally sufficient proof that Crane had an applicable duty to warn and (2) because there was no evidence that Crane had acted recklessly in failing to warn the users of its valves about the release of asbestos dust from the combined use of the valves and third-party asbestos-laden sealing components, the court could not instruct the jurors on the potential applicability of the recklessness exception to CPLR 1601’s provision for equitable allocation of liability among joint tortfeasors. The court denied Crane’s motion for a directed verdict, overruled its objection to the court’s proposal to issue a charge on the recklessness exception to the rule of CPLR 1601 and, later, instructed the jurors on that exception.

Following deliberations, the jury found Crane 99 percent liable and awarded $32 million in damages. Crane then moved to set aside the verdict and contended, that under Rastelli v Goodyear Tire & Rubber Co. (79 NY2d 289) and related case law, it had no duty to warn the users of its valves of asbestos-related hazards arising from the use of the valves in conjunction with third-party products containing asbestos. Consequently, Crane argued, the court had erroneously instructed the jurors that it had such a duty, and the evidence was legally insufficient to support the jury’s verdict in the absence of any cognizable duty. Crane also renewed its argument that Admiral Sargent should have been allowed to testify that, in his opinion, even if Crane had issued warnings regarding the hazardous release of asbestos dust during the process of replacing the gaskets and packing on its valves, Dummitt would never have received those warnings. Crane also asserted the jury’s allocation of liability was against the weight of the evidence and that the damages award was excessive.

The Supreme Court denied Crane’s motion except to the extent of setting aside the verdict only to the extent of remitting for a new trial on damages or a stipulated reduction in damages. The parties ultimately stipulated to a reduced damages award of $5.5 million for past pain and suffering and $2.5 million for future pain and suffering, and the court entered judgment accordingly. Crane appealed.

The New York Court of Appeals, in a divided panel, AFFIRMED the judgment in Dummit, holding that (1) although Crane had not manufactured, designed or sold the asbestos-containing products that Dummitt had installed on its valves, Crane had a duty to warn the users of its valves that the use of the valves with third-party asbestos-based products could result in exposure to hazardous asbestos particles; and (2) Crane’s specification of asbestos-laden gaskets, packing and insulation, its promotion of the use of such asbestos-based replacement parts via its marketing of Cranite, and its contribution to the “Naval Machinery” manual mandating the use of such asbestos-containing products “‘strengthened the connection'” between Crane’s products and the other manufacturers’ asbestos-laden products. Therefore, the Appellate Division ruled, Crane’s “substantial interest” in the installation of asbestos-based products on its valves created a duty to warn of the dangers of that practice. The Appellate Division also declined to reverse the trial court’s judgment based on Crane’s remaining complaints about the trial court’s instructions to the jury, the preclusion of Admiral Sargent’s proposed opinion testimony and the jury’s verdict.

Matter of Eighth Judicial District Asbestos Litigation (Suttner v. A.W. Chesterton, et al), June 28, 2016

The plaintiff, Joan Suttner, filed suit in the New York Supreme Court, alleging her husband, Gerald Suttner, was diagnosed and passed away from mesothelioma from asbestos exposure as a result of his work as a pipe fitter at General Motors (GM” Tonawanda Engine Plant from 1960 to 1979. The plaintiff alleges this plant had a steam pipe system featuring Crane valves with third-party gaskets and packing materials. The gaskets, packing and surrounding insulation were not manufactured or designed by Crane, and they all contained asbestos. The plaintiff alleges Suttner changed gaskets on Crane valves hundreds of times during his tenure at the plant which included, among other work, cutting new asbestos-containing packing and installing that packing along with a new asbestos-containing gasket.

At trial, the evidence established that Crane sold its valves to GM for use in the high-pressure steam pipe systems in GM’s factories. By Crane’s own admission, it may have supplied GM with valves accompanied by asbestos-based gaskets and packing. Crane’s schematics for the valves even specific the use of asbestos-based packing and gaskets. The plaintiff further noted that Crane offered catalogs in 1936 and 1955 which encouraged customers to install “Cranite” gaskets on its valves, noting that “Cranite gaskets are used on all Crane valves for high-pressure, saturated or superheated steam”.

Accordingly, among other assertions, plaintiff put forth a cause of action against Crane Co. for failure to warn of the perils of the combined use of Crane’s valves with the asbestos-containing third-party products.

At the end of trial, the court, over Crane’s objection, instructed the jurors about the duty of a manufacturer, such as Crane, to warn of the dangers of certain uses of its products. These instructions included concepts of foreseeability, knowledge, and reasonableness. At the end of its deliberations, the jury returned a verdict finding that Crane had rendered its valves defective by failing to warn of the dangers of the joint use of the valves and the other manufacturers’ products and that the pertinent defects in the valves were a substantial factor in causing Suttner’s injuries and death. The jury apportioned 4 percent of the liability to Crane and awarded a total of $3 million in damages.

Crane moved to set aside the verdict asserting, among other arguments, that the duty to warn arises only if the manufacturer’s product, as designed, is physically incapable of working as intended without the other company’s product. In Crane’s view, as long as the manufacturer’s product could still technically work without the other product, it does not matter that the manufacturer’s customers cannot afford to maintain the intended operation of the product for any reasonable period of time with any alternative product.

The New York Court of Appeals declined to accept Crane’s proposed rule. The court specifically noted that the determination of whether a duty exists turns to a substantial degree on a reasonable and fair allocation of costs and burdens, and Crane’s proposed rule with respect to duty would impose an unreasonable monetary cost and an inappropriate burden exclusively on manufacturers’ customers. For example, in Crane’s scenario, the customer would face an untenable choice between spending unsustainable amounts of money to make the manufacturer’s product operate safely and trying to discover the dangers inherent in using the cheaper product with the manufacturer’s product and then warning the users of the two products about that danger. In doing so, Crane’s rule would either shift the burden of issuing a warning exclusively to consumers or punish consumers who do not incur potentially ruinous financial costs via the installation of the alternative component to prevent a danger that could be more efficiently managed by a low-cost warning from the manufacturer of the primary product. The court noted it would not adopt such an unduly narrow and insensible view of the duty to warn.

In Suttner, the court ultimately denied Crane’s appeal and held from the evidence presented, it was readily inferable that Crane intended, affirmatively recommended and could have reasonably foreseen that the users of its valves would install asbestos-containing sealing components on the valves, that Crane learned that its customers were engaging in this practice post sale, and that no non-asbestos products were suitable as a matter of economic or mechanical necessity to allow the valves to function in high-pressure, high-temperature steam pipe systems. As a result of the above, Crane had a duty to warn customers of the perils of the combined use of Crane’s valves.

The New York Court of Appeals, in regards to both Dummit and Suttner, held the lower courts properly determined that Crane had a duty to warn the reasonably foreseeable users of its valves that the synergistic use of the valves and third-party asbestos-containing products could expose them to carcinogenic asbestos dust, and the evidence was legally sufficient to support the jury’s finding of Crane’s liability in each case.

Read the full decision here.


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