Court of Appeals of New York Rejects Argument that Coke Ovens Are not Products For Purposes of Strict Liability

NEW YORK – The plaintiff, Donald Terwilliger, brought an asbestos suit against multiple defendants. The complaint included a count that Honeywell, as successor in interest to the Wilputte Coke Oven Division of the Allied Chemical Corporation (Honeywell), was strictly liable for emissions coming from its coke ovens at Bethlehem Steel’s Lackawanna Plant in New York. Specifically, Terwilliger alleged that he was exposed to the coke oven emissions while working as a lid man from 1966-1993. He passed away from lung cancer in 2012.

At the trial level, the court denied Honeywell’s motion for summary judgment after it argued that the coke ovens were not “products.” Therefore, it was not subject to strict liability since its contract with Bethlehem Steel was one sounded in services rather than goods or products. The trial court found that “the coke ovens are more like machines or equipment than a building.” However, on appeal, the trial court was reversed. The appellate division found “that service predominated the transaction herein and that it was a contract for the rendition of services, i.e., a work, labor and materials contract, rather than a contract for the sale of a product.” The appellate division also noted that the coke oven was akin to a permanent fixture to real property. The plaintiff appealed.

On appeal, the court stated that a product is defective when:

  1. It contains a manufacturing flaw
  2. It is defectively designed
  3. It is not accompanied by adequate warnings for the use of the product.

The court noted the presupposition that exists as to whether something is a product for strict liability purposes. Physical characteristics are less important than the potential dangers imposed by the subject, according to the court. Often weaved into the product analysis is whether a manufacturer owes a duty to warn, including where foreseeability of harm should have been known. Failure to warn is sounded in tort rather than contract. The court, therefore, analyzed whether the coke ovens were products within a “broad context.”

Applying the summary judgment standard, the court found that Honeywell had not met its burden to show that the coke ovens were not products. The fact that the defendant had exerted control over the way in which the ovens were built was a factor in the court’s decision. Additionally, the defendant benefitted financially, not just from the installation of the ovens, but also from the production process, according to the court. Moreover, the defendant was in the “best position” to “assess the safety of the coke ovens.”

The court rejected Honeywell’s argument that it should use a bright line test to prove that the ovens are not products. Honeywell argued that because the ovens are built into the large structures, and that fixtures to real property, the ovens are not products in the context of strict liability. The court disagreed and noted that the authority the defendant cited was related to a tax issue, rather than the issue of strict liability. Consequently, the appellate division was reversed and summary judgment was denied. A strong dissent hammering the sheer size of the coke ovens was issued by two judges.

Read the case decision here.