Asbestos Verdict Reinstated in California

LOS ANGELES (CN) — The California Supreme Court ruled that an asbestos supplier is responsible for failing to warn end users about the dangers of a manufacturer's product.

William Webb sued raw asbestos supplier Special Electric Company after he was diagnosed with mesothelioma in January of 2011, caused by inhaling asbestos fibers while he was working for a pipe supply company as a warehouseman and truck driver.

Special Electric Company was the broker who sold crocidolite asbestos — the most toxic form of asbestos, which is several times more likely to cause cancer — to Johns-Manville Corporation, according to court records.

Johns-Manville owned and operated a chrysotile asbestos mine in Quebec, and also made an asbestos cement pipe known as "transite pipe."

For 10 years, Webb says he handled transite pipe that contained trace amounts of crocidolite asbestos as part of his job while working for Pyramid Pipe & Supply Co.

The pipe he handled was manufactured by using recycled broken or damaged bits of other products that contained crocidolite asbestos fiber. The end pipe product contained about 20 percent of the scraps.

In making deliveries to job sites, Webb claims he was not told the product he was handling posed a risk for cancer nor was he advised to wear a respirator. The pipes were also not packed with a warning label about the dangers posed when handled, according to court records.

A jury found Special Electric 18 percent liable for negligence and failure to warn, but did not find the company liable for supplying a defective product and apportioned the remaining fault to Johns-Manville and other entities.

Before judgment was entered, Special Electric was granted its request for a ruling in its favor, regardless of the jury's verdict, after it insisted that a supplier should not be held liable for not warning end users about the dangers of its product.

In reviewing that decision, five of the seven California Supreme Court justices ruled Monday that the decision to overturn the jury's verdict cannot stand.

"Because substantial evidence supports the jury's verdict, and Special Electric did not have a complete defense as a matter of law, the entry of [judgment notwithstanding the verdict] was unjustified," Justice Carol Corrigan wrote for the majority.

Citing the elements of the sophisticated intermediary doctrine — under which a supplier can discharge its duty to warn if it sells to a sufficiently sophisticated buyer or provides adequate warnings — the majority point out that the supplier bears the burden to show an intermediary was adequately warned of the hazards associated with a product, and that the risks were understood and would be passed on to the end user.

"The goal of products liability law is not merely to spread the risk but also 'to induce conduct that is capable of being performed.' The sophisticated intermediary doctrine serves this goal by recognizing a product supplier's duty to warn but permitting the supplier to discharge this duty in a responsible and practical way," Corrigan wrote. "It appropriately and equitably balances the practical realities of supplying products with need for consumer safety."

Special Electric never presented that argument to the jury, the majority of California's high court ruled Monday.

The company also did not meet its burden to show that Johns-Manville knew of the acute risk associated with crocidolite asbestos it supplied or that it would warn end users, the justices found.

"Although the record clearly shows Johns-Manville was aware of the risks of asbestos in general, no evidence established it knew about the particularly acute risks posed by crocidolite asbestos Special Electric supplied," Corrigan wrote. "In addition, plaintiffs presented evidence that at least one Special Electric salesperson told customers crocidolite was safer than other types of asbestos fiber, when the opposite was true." (Emphasis in original).

Two justices — Tani Cantil-Sakauye and Ming Chin — agreed with the majority that evidence supports the jury's verdict against Special Electric, but disagreed with the majority's holding that "a supplier of hazardous materials may satisfy its duty to warn end users by relying on an intermediary where the supplier fails to warn the intermediary of the dangers and knows only that the intermediary 'should be' rather than 'is actually' aware of the dangers."

"Because a requirement that a supplier convey warnings to a direct purchaser imposes only a minimal burden, no policy reason exists to allow suppliers to rely on intermediaries even if the suppliers do not know the intermediaries actually know of the dangers. Neither the cases nor the principles the majority cites support its holding," Cantil-Sakauye wrote in a concurring and dissenting opinion, in which Chin joined.

Responding to Monday's decision, Special Electric attorney Edward Hugo of Hugo Parker LLP in San Francisco said, "We are pleased that the Supreme Court has formally adopted the sophisticated intermediary doctrine in California and articulated the elements of the defense in a clear fashion so that it may be applied, uniformly, going forward."

Webb's attorney Ted Pelletier, based in San Anselmo, Calif., did not immediately respond to a request for comment.

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