Partial Summary Judgment Denied to Shipbuilding Company and Auto Parts Retailer

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U.S. District Court for the Northern District of California, March 30, 2021

Before the court are motions for summary judgment filed by defendant National Steel and Shipbuilding Company (NASSCO) and Pep Boys-Manny, Moe & Jack of California.

Defendant NASSCO moves for summary judgment on the theory that, as a government contractor, it enjoys derivative immunity from asbestos- related liability. In the alternative, should material facts regarding its overhaul of the USS Bristol County remain in dispute, NASSCO moves for partial summary judgment as to the plaintiffs’ premises owner claim for relief. The plaintiffs oppose all grounds for summary judgment. The court noted that the issue in dispute was whether NASSCO complied with Navy specifications and guidelines while overhauling the USS Bristol County. Defenses derived from a contractor’s business with the government may come from several distinct doctrines. Both “government contractor” and Yearsley immunity arguably apply here. Under both, however, contractors receive protection only when they have complied with relevant federal standards. NASSCO claims complete adherence to those standards; the plaintiffs allege negligence and nonconformity. After consideration of the parties’ briefs and attached exhibits, as well as oral argument, the court found that material facts about this compliance remain “such that a reasonable jury could return a verdict for the nonmoving party.

As to NASSCO’s request for partial summary judgment regarding premises owner liability, the plaintiffs reply that their claim for relief “is for [both] ‘premise owner/contractor liability’ — [and] is not limited to just premises liability, [but] also includes claims that the negligent activities of defendant’s employees exposed Mr. Pizarro to asbestos.” Because the overarching issues of potentially negligent and noncompliant performance remain in dispute and because “the general maritime law has recognized the tort of negligence for more than a century, and . . . breaches of a maritime duty are actionable when they cause death, as when they cause injury,” NASSCO cannot ask for partial judgment on a legitimate and unsettled matter.

Turning to Pep Boy’s motion for summary judgment, the court noted that auto parts retailer seeks partial summary judgment on three fronts: (1) negligent misrepresentation, (2) fraud by nondisclosure, and (3) the plaintiffs’ request for punitive damages. The plaintiffs waive negligent misrepresentation and fraud by nondisclosure, so Pep Boys’ requests for partial summary judgment as to those claims are granted. The main dispute, then, lies with punitive damages. The plaintiffs in the current suit indicate that Pep Boys acted with “malice.” California’s Civil Code defines “malice” in the punitive damages context as “conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others. The court noted that the plaintiffs pointed to admissible evidence that Pep Boys’ corporate representative, establishes that, as early as 1930, Pep Boys “was actually aware that it was selling brakes that contained asbestos,” and continued selling asbestos-containing brakes until 2001. Even though Pep Boys “received product information and warnings about the connection between asbestos dust and cancer from manufacturers, it did not believe it was obligated to ensure that those warnings were provided to the consumers.

The court stated that the plaintiffs have presented evidence of malice sufficient to create a material issue of disputed fact. A jury must aid in sorting out whether the record truly depicts a disregard of customer safety despite Pep Boys’ knowledge of the potential dangers of certain automotive products. Therefore, the court denied Pep Boys’ request for partial summary judgment as to punitive damages. 

Read the full decision here.