What Does New York’s Decision on Duty to Warn Mean Going Forward in Asbestos Litigation?

New York’s highest court has imposed a duty on equipment manufacturers to warn about asbestos containing products manufactured by other manufacturers. This long-awaited decision now resolves the duty issue, but what does it mean going forward in asbestos litigation?

On June 28, 2016, the New York Court of Appeals ruled in the Dummitt/Suttner cases that Crane Co. had a “a duty to warn of the danger arising from the known and reasonably foreseeable use of its product in combination with a third-party product which, as a matter of design, mechanics or economic necessity, is necessary to enable the manufacturer’s product to function as intended.”

Dummitt

In this case it was alleged that the decedent, Ronald Dummitt, was exposed to asbestos while a Navy boiler technician from 1960 to 1977. As a part of his duties, the decedent worked on Crane valves, which included working with asbestos gaskets, packing, and insulation. Those asbestos-containing products were designed and manufactured by companies other than Crane. 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 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. Additionally, 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.

During trial, Crane called Admiral David Putnam Sargent (Admiral 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 generally that valve manufactures (i.e. Crane), had no role in determining whether, and with what materials, the Navy will choose to insulate the valves after the Navy has received them.

At the conclusion of the trial the jury awarded plaintiff $32 million in damages, holding Crane 99 percent liable. The Supreme Court had denied Crane’s motion for a directed verdict and motions after trial, with the exception of setting aside the verdict 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 rulings of the lower court were affirmed and the Court of Appeals held 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; (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. Based on the foregoing, the court upheld the lower court’s ruling that 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.

Suttner

In this case, it was alleged that the decedent, Gerald Suttner, was exposed to asbestos while working as a pipe fitter at the General Motors (GM) Tonawanda Engine Plant from 1960 to 1979. The plant allegedly had a steam pipe system, featuring Crane valves with third-party asbestos-containing gasket, packing and insulation materials, that decedent worked on. At trial, the evidence established that Crane sold its valves to GM to use in its factories’ high-pressure steam pipe systems. 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 specified 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.”

Following the conclusion of the trial, 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 decedent’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 rejected Crane’s position. 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. The court went on to hold that 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.

Take Away

Going forward, a manufacturer will need to establish it had no duty to warn by showing its products could be used just as effectively and economically with non-asbestos containing parts, that asbestos-containing parts were not held out by the manufacturer to be the preferred replacement parts and it was the customer’s choice to use the asbestos-containing parts over the non-asbestos parts. This standard does not eliminate this defense in New York, but certainly sets the bar high. Proper development of the record during discovery as to the exact purpose of the equipment, including whether it was being used under circumstances requiring asbestos-containing materials, will be crucial. A manufacturer may also have to develop expert witnesses who can attest to a product’s utility and uses to create a persuasive record to support a defense of no duty to warn.

 

 

 

 


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