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Plaintiffs’ Fraud and Loss of Consortium Claims in Shipyard Action Dismissed; Various Other Claims Remain

U.S. District Court for the Southern District of California

In this asbestos action, decedent Dennis Freeman worked as an insulation contractor at shipyards in several states, including California, from approximately 1980 into the mid-1990s. Several defendants moved to dismiss certain claims in the plaintiffs’ complaint, as well as moved to dismiss the plaintiffs’ complaint in its entirety.

Defendant BAE Systems San Diego Ship Repair Inc. (BAE) challenged the court’s subject-matter jurisdiction of this action. However, drawing all reasonable inferences in the plaintiffs’ favor, the court disagreed. First, the court deemed the location test to be satisfied as at least some of the decedent’s alleged exposure at various shipyards would have taken place on navigable waters. The court also deemed the connection test to be satisfied as “deadly exposure to asbestos in shipyards certainly falls under the wide umbrella of activities that have the potential to disrupt commercial maritime activity.” Further, “Plaintiffs’ allegation that decedent was injured by unsafe work conditions in shipyards is sufficient to show a substantial relationship to traditional maritime activity.”

Defendant Huntington Ingalls Incorporated (HIC) moved to dismiss the plaintiffs’ complaint for lack of personal jurisdiction. Similarly, the court denied this motion. With regard to specific personal jurisdiction, the court noted the plaintiffs’ submission of a deposition where the decedent’s former co-worker testified that they were exposed to asbestos at Continental Marine, as well as a newspaper article listing Continental Marine as a shipyard in San Diego. HIC’s articles of merger showed Continental Marine merged into the Newport News Shipbuilding and Dry Dock Company. As such, the court noted that the plaintiffs met the first prong of the Ninth Circuit’s three-part test as they “alleged sufficient facts to show that a corporation which later became HIC purposefully availed itself in California by operating a shipyard there.” The second prong was also met as “Plaintiffs have sufficiently shown through the deposition that decedent’s injuries resulted at least in part from exposure that took place at the same California-based shipyard, giving rise to the instant action.” Further, HIC did not set forth a compelling argument as to why jurisdiction would be unreasonable.

Next, the parties disagreed as to whether maritime or California law applied. The court found that maritime law applied to this action. The court first set forth Adamson v. Port of Bellingham for the proposition that “if the district court could have maritime jurisdiction over a tort claim, substantive maritime law controls the claim, whatever the forum or asserted basis of jurisdiction.” The court further explained that maritime law is not inconsistent with California state law as general maritime law has recognized both the tort of negligence and common-law principles of products liability.

The parties also made several challenges to specific causes of action for failure to state a claim under Rule 12(b)(6). With regard to the plaintiffs’ negligence claim, two defendants argued that “Plaintiffs cannot establish the elements of a negligence claim because they make undifferentiated claims against all defendants.” However, the court disagreed, setting forth that the plaintiffs need not “allege specific actions for each defendant because each defendant is accused of identical conduct committed separately.” In addition, the court disagreed with defendant National Steel and Shipbuilding Company’s (NASSCO) claim that the plaintiffs’ negligence claim is a “thinly veiled product liability claim.” However, the court set forth that “Plaintiffs have properly stated a claim under a standard negligence theory and this alone is enough to survive a 12(b)(6) challenge.”

The court also denied the defendants’ challenges to the plaintiffs’ strict liability claims. Defendant BAE’s argument that the plaintiffs’ failed to establish the elements of causation was unavailing as “[a]t this stage, plaintiffs have sufficiently alleged that decedent was actually exposed to asbestos and that such exposure [was not] just a substantial factor in causing his injuries but was the sole cause of his injuries.” Defendant NASSCO’s contention that a Navy ship is not a “product” was rejected as “the complaint specifically alleges that defendants, including NASSCO, ‘manufactured, fabricated, designed, [and] developed… products containing asbestos and/or products which created an asbestos hazard… [that] were defective.’” In addition, the court declined to dismiss the plaintiffs’ claim for punitive damages.

However, the court granted BAE’s motion to dismiss Linnea Freeman’s loss of consortium claim. The court reasoned that “[i]t would be discordant with the Supreme Court’s holdings and Congress’ intent for this Court to allow recovery for loss of consortium in a case involving the death of a non-seaman that did not occur on the high seas.” The court also granted BAE’s motion to dismiss the plaintiffs’ fraud allegations as “Plaintiffs make a naked request for damages for fraud that is not associated with a substantive cause of action.”

Thus, the court granted BAE’s motions to dismiss the plaintiffs’ loss of consortium and fraud claims. The court denied all other claims.

Read the full decision here.