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Saturday, June 6, 2020

Asbestos: Strict Liability Imposed Against Product Manufacturers for Ordinary Product Life

The NJ Supreme Court decided an asbestos product liability case that mandates strict liability against manufacturers or distributors of products that contain asbestos-fiber. The court in granting strict liability for failure to adequately warn ultimate users during the ordinary life of the product of the dangers. The Court aligned NJ common law with the US Supreme Court, the NY Court of appeals and the Maryland Court of Appeals.

The Court’s synopsis:

Arthur G. Whelan v. Armstrong International, Inc. (A-40/41/42/43/44/45/46-18) (081810)
Argued November 19, 2019 -- Decided June 3, 2020 

ALBIN, J., writing for the Court.

The Court considers whether defendants who manufacture or distribute products that, by their design, require the replacement of asbestos-containing components with other asbestos-containing components during the ordinary life of the product have a duty to give adequate warnings to the ultimate user.

Plaintiff Arthur Whelan filed suit against the seven present defendants, who allegedly manufactured or distributed products integrated with asbestos-containing components. Whelan claims he was exposed to asbestos dust while working on those products, including their original asbestos-containing components or asbestos-containing replacement components. Defendants contended that Whelan could not establish that his exposure to asbestos was the result of any product they manufactured or distributed.

They disclaimed any liability for Whelan’s exposure to asbestos-containing replacement parts that they did not manufacture or distribute, even though the parts were incorporated into their products. Whelan countered that it made no difference whether he was exposed to defendants’ original asbestos-containing components or a third party’s asbestos- containing components -- defendants’ duty to warn and liability attached to both.

The trial court granted summary judgment in favor of defendants. The court concluded that defendants could not be held liable for asbestos-containing replacement components later incorporated into their products unless those components were manufactured or distributed by defendants. And the court found that Whelan could not establish that he was exposed to asbestos-containing components that defendants manufactured or distributed, as opposed to third-party replacement components.

The Appellate Division reversed, determining that defendants had a duty to warn about the dangers of the asbestos-containing replacement components necessary for the continued functioning of their products and that defendants can be held strictly liable for the failure to do so, provided Whelan suffered sufficient exposure to the replacement components to contribute to his disease. See 455 N.J. Super. 569, 599, 606-08 (App. Div. 2018).

After Whelan appealed, the Appellate Division issued Hughes v. A.W. Chesterton Co., in which the defendant manufactured pumps whose component parts included asbestos-containing materials. 435 N.J. Super. 326, 332, 341-42 (App. Div. 2014).

Those component parts were replaced regularly as part of routine maintenance with other asbestos-containing materials. Id. at 332. The Hughes court held that the defendant had a duty to warn, regardless of who manufactured the replacement components, because the “asbestos-containing gaskets and packing posed an inherent danger in the pumps as originally manufactured” and because “it was reasonably foreseeable . . . that the gaskets and packing would be replaced regularly with gaskets and packing that contained asbestos.” Id. at 341. But the Hughes panel upheld the trial court’s grant of summary judgment because the plaintiffs failed to establish medical causation. Id. at 346.

Writing for the Appellate Division panel in this case, Judge Currier rejected the ultimate conclusion reached by the Hughes court -- that a defendant manufacturer or distributor could not be held strictly liable in a failure-to-warn lawsuit for exposure to a third party’s asbestos-containing replacement components installed as part of the regular maintenance of the defendant’s integrated product. 455 N.J. Super. at 579-80, 597. In contrast to the Hughes court, the Whelan panel concluded that defendants could be held strictly liable for the failure to warn about a third party’s asbestos-containing replacement components essential to the functioning of the product, provided that Whelan established medical causation. Id. at 597-606. To show medical causation, Whelan must prove that his exposure to the third party’s asbestos-containing replacement components sufficiently contributed to his contracting mesothelioma. Id. at 605-06.

The Appellate Division found that Whelan had “presented sufficient evidence detailing his exposure to asbestos,” either from defendants’ original or replacement components or from a third party’s replacement components, to withstand summary judgment. Id. at 580. Thus, the Whelan panel reversed the summary judgment order and left the disputed issues of fact to be resolved by a jury. Id. at 580, 607-08.

The Court granted each defendant’s petition for certification. 236 N.J. 358-62 (2019).

HELD: Manufacturers and distributors can be found strictly liable for failure to warn of the dangers of their products, including their asbestos-containing components and a third party’s replacement components, provided a plaintiff can prove the following: (1) the manufacturers or distributors incorporated asbestos-containing components in their original products; (2) the asbestos-containing components were integral to the product and necessary for it to function; (3) routine maintenance of the product required replacing the original asbestos-containing components with similar asbestos-containing components; and (4) the exposure to the asbestos-containing components or replacement components was a substantial factor in

1. In a common law, strict-liability, failure-to-warn action, a plaintiff must prove that (1) without warnings or adequate warnings, the product was dangerous to the foreseeable user and therefore defective; (2) the product left the defendant’s control in a defective condition (without warnings or adequate warnings); and (3) the lack of warnings or adequate warnings proximately caused an injury to a foreseeable user. That standard encompasses two criteria that must be satisfied in a strict-liability, failure-to-warn case: product-defect causation and medical causation. Medical causation requires proof of an exposure of sufficient frequency, with a regularity of contact, and with the product in close proximity to the plaintiff. (pp. 22-26)

2. Any failure-to-warn analysis requires an inquiry into the reasonableness of the defendant’s conduct, either in forgoing a warning or in crafting the warning. Beginning with the assumption that the manufacturer or distributor knows the nature of its product and its injury-producing potential, the issue then becomes whether the manufacturer or distributor acted in a reasonably prudent manner in providing warnings adequate to put the user on notice of the dangers and safe use of the product. New Jersey courts presume that a worker who receives adequate warnings about the dangers of a product will follow the instructions and take whatever precautionary steps the warnings advise. That rebuttable heeding presumption accords with the manufacturer’s basic duty to warn and fairly reduces the victim’s burden of proof. (pp. 26-27)

3. In Beshada v. Johns-Manville Products Corp., the Court rejected the “state of the art” defense and allowed for strict liability to be imposed against the defendant manufacturers “for failure to warn of dangers which were undiscoverable at the time” they manufactured their products. 90 N.J. 191, 205 (1982). The Court determined that “[t]he burden of illness from dangerous products such as asbestos should be placed upon those who profit from its production and, more generally, upon society at large, which reaps the benefits of the various products our economy manufactures.” Id. at 209. (pp. 28-29)

4. At this summary-judgment stage, the Court must view the evidence in the light most favorable to Whelan and accept certain provisional conclusions: (1) defendants’ products were designed to function with asbestos-containing components; (2) the manufacturers and distributors designed their products so that during the life of those products the asbestos-containing components would have to be replaced with similar asbestos- containing components for the products to function; (3) without Whelan’s use of protective gear, the replacement process, which led to the release of asbestos dust, was a dangerous and potentially injury-producing activity; (4) Whelan’s replacement of the asbestos-containing components during routine maintenance created asbestos dust, which substantially contributed to his contracting mesothelioma; (5) the asbestos-containing original components and replacement components necessary for defendants’ products to function were no less dangerous whether manufactured or distributed by defendants or third parties; and (6) had defendants placed warnings on their products, Whelan would have heeded those warnings and donned protective gear. (p. 30)

5. In determining whether defendants owed a strict-liability duty to provide warnings on their products for foreseeable users, like Whelan, who replaced asbestos-containing component parts with similar asbestos-containing components, the Court’s analysis is informed by principles enunciated in Beshada and general common law jurisprudence. Typically, in determining whether one party owes a duty to another, courts weigh several factors -- the relationship of the parties, the nature of the attendant risk, the opportunity and ability to exercise care, and the public interest in the proposed solution. In addition, foreseeability of harm is a significant consideration in determining whether to impose a duty. (pp. 31-32)

6. Here, the relationship is between a manufacturer and the ultimate user of the product. A manufacturer’s duty to a foreseeable user of its products has long been recognized. Manufacturers and distributors of asbestos-containing products obviously have the ability to act reasonably -- to exercise due care. They can place proper warnings on their products, making those products safer “at virtually no added cost and without limiting [the product’s] utility.” See id. at 201-02. Warnings about the dangers of the original asbestos-containing components could easily encompass the dangers of the required asbestos-containing replacement components integrated into the product during routine maintenance at later times. The public has a clear stake in the proposed solution in light of the well-known risks attendant upon exposure to asbestos dust. Foreseeability, knowledge of the dangers inherent in the asbestos-containing components here, is imputed to defendants. See id. at 202. The risks inherent in a product containing asbestos components can “be reduced to the greatest extent possible without hindering its utility” with the attachment of proper warnings. See id. at 201. Last, considering that asbestos-related illnesses are borne by workers and their families, manufacturers are generally in the best position to “spread the cost of losses caused by [their] dangerous products.” See id. at 205-06. (pp. 33-34)

7. Given the summary-judgment record before it, the Court concludes that imposing liability on a manufacturer or distributor of a product for failing to provide adequate warnings about the danger of incorporating required asbestos-containing replacement components into the product during routine maintenance satisfies an abiding sense of basic fairness under all of the circumstances in light of considerations of public policy. Here, the products were dependent on asbestos-containing replacement parts, whether manufactured or distributed by defendants or third parties. That is the way the products were designed. Defendants had a duty to provide warnings given the foreseeability that third parties would be the source of asbestos-containing replacement components. Warnings on defendants’ products would have provided a reliable form of protection for the ultimate user. The lack of warnings rendered the products defective. (pp. 35)

8. The Court reviews relevant cases from other jurisdictions and notes that some have imposed a duty to warn under similar circumstances while others have not. The Court concludes, however, that New Jersey’s evolving common law jurisprudence in the field of failure-to-warn, strict-liability cases involving asbestos-containing products leads to a result that aligns with similar decisions rendered by the United States Supreme Court, the New York Court of Appeals, and the Maryland Court of Appeals, which have recognized a strict-liability duty to warn of the dangers of necessary replacement components. Like those courts, the Court rejects the position taken by the Hughes court that the product is one thing for product-causation and adequate-warning purposes (defendants’ products and asbestos-containing component parts) and another thing for medical-causation purposes (asbestos-containing component parts required for the product to function). The Court disagrees that its holding here alters the requirement for proving medical causation related to defendants’ products and observes that plaintiffs still have a strong incentive to identify asbestos-containing component manufacturers, if they can, because those manufacturers are another source for the payment of damages. (pp. 36-42)

The judgment of the Appellate Division is AFFIRMED and the matter is REMANDED to the trial court.

JUSTICE PATTERSON, dissenting, expresses the view that the majority has substantially altered the test for medical causation that has governed New Jersey’s asbestos litigation for decades and stresses that New Jersey has never adopted “theories of collective liability” or other alternative forms of proof as a substitute for product identification in cases such as this. Justice Patterson explains that under longstanding precedent, plaintiffs were required to make a prima facie showing of sufficient intensity of exposure to that specific defendant’s product -- as contrasted with another manufacturer’s product or a generic class of toxic exposures -- to support a finding of proximate cause by a reasonable jury. Justice Patterson views the majority opinion to erode the core element of a plaintiff’s burden of proof in an asbestos case, to unfairly impose upon defendants liability premised on products that they neither manufactured nor sold, and to discourage the product-identification discovery that ordinarily leads to an equitable allocation of fault.

Click here to read the Court’s Opinion.

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Jon L. Gelman of Wayne NJ is the author of NJ Workers’ Compensation Law (West-Thomson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thomson-Reuters). For over 4 decades the Law Offices of Jon L Gelman  1.973.696.7900  has been representing injured workers and their families who have suffered occupational accidents and illnesses.

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