|
SOPHISTICATED PURCHASER DOCTRINE IS NOT A DEFENSE TO STRICT PRODUCTS LIABILITY CLAIMS WHEN PLAINTIFF IS NOT THE PURCHASER AND IS NOT AWARE OF DANGEROUS PROPENSITIES
Stewart v. Union Carbide Corporation
(Cal. App. Ct. 2010)
In a written opinion issued November 16, 2010, the California Court of Appeal ruled that the sophisticated purchaser defense is not available to a manufacturer of a defective product when a plaintiff was not the purchaser of the product and was neither aware nor had reason to be aware of the product’s dangerous propensities.
Factual Background
Plaintiff Larry Stewart (hereinafter “Stewart”) worked as a plumber for almost 40 years prior to his diagnosis with mesothelioma in 2007. During his career as a plumber, Stewart often worked on construction projects in close proximity to drywallers. These drywallers frequently used a joint compound containing asbestos that, when sanded, released into the air. Defendant Union Carbide mined and sold raw asbestos to various intermediary manufacturers, each of whom used the asbestos to manufacture joint compound. While working on construction projects, Stewart never saw any warning about the hazards of asbestos.
After being diagnosed with mesothelioma, Stewart sued Union Carbide (and others with whom Stewart settled prior to trial), alleging claims for negligence and strict products liability on both failure to warn and design defect/consumer expectation theories. The jury found for Stewart on his claims for negligence and strict products liability, determining that Union Carbide was 85% at fault. The jury also found that Stewart was entitled to punitive damages.
The Appellate Court’s Holding
On appeal, Union Carbide’s argument was threefold: (1) that the jury should have been instructed that where the risk of using a hazardous product is known, or should be known, by the purchaser, the product supplier has no duty to warn of the product’s potential hazards; (2) a raw material supplier’s duty to warn is measured by what is known, or should be known, by the purchaser of the raw product, rather than the individual plaintiff’s knowledge; and (3) the sale of a raw material to a sophisticated intermediary purchaser who knew, or should have known, of the risks of that material cannot be the legal cause of any harm the raw material may cause. The Appellate Court rejected each of Union Carbide’s arguments and ruled in favor of Stewart.
Union Carbide based its arguments in the rationale set forth in Johnson v. American Standard, Inc. (2008) 43 Cal.4th 56. In Johnson, a professional, EPA certified, repair technician was injured while repairing an air conditioning unit which contained no warnings of a dangerous condition that could arise during repair. The California Supreme Court, in reaffirming the general rule that manufacturers have a duty to warn consumers about the hazards inherent in their products, carved out an exception, holding that sophisticated users do not need to be warned about dangers of which they are, or should be, aware. In such an instance, the failure to warn is not the legal cause of harm, rather, the user’s knowledge of the danger equates to prior notice. Thus, an individual that holds himself out as a member of a sophisticated group of users is charged with the level of knowledge and skill associated with that group, even if the representative does not actually possess the same knowledge and skill.
The Appellate Court in Stewart, however, ruled that Johnson’s “sophisticated user” defense was unavailable to Union Carbide on the grounds that Johnson neither imputed an intermediary’s knowledge to Stewart nor charged him with any knowledge except that which was available to him through training. Markedly, Union Carbide did not argue that Stewart had the opportunity to acquire any knowledge concerning the dangers of asbestos. Rather, Union Carbide tried to argue that the intermediaries to whom it sold asbestos knew, or should have known, of the dangers of asbestos, and that Union Carbide’s duty to warn Stewart was directly related to the knowledge that intermediary purchasers possessed. Such a theory, the Court ruled, has nothing to do with Johnson’s sophisticated user defense. Indeed, Johnson was not concerned with the knowledge of the purchaser, but with the knowledge of the user.
Rather than implicating the sophisticated user defense, the Court pointed out that Union Carbide was actually relying on the supplier/component parts doctrine (hereinafter “supplier doctrine”). The supplier doctrine states that the manufacturer of a product component or raw material is not liable for injuries caused by the finished product unless it appears that the component itself was defective when it left the manufacturer. (See Tellez-Cordova v. Campbell-Hausfeld/Scott Fetzger Co. (2004) 129 Cal.App.4th 577, 581.) In the context of asbestos cases, asbestos suppliers, like Union Carbide, have repeatedly sought the protection of the supplier doctrine. The doctrine, however, does not apply because raw asbestos (i.e., the component part) is a defective product.
Finally, the Court also held that the sophisticated intermediary doctrine was inapplicable, as the doctrine only applies if a manufacturer provided adequate warnings to the intermediary. (See Carmichael v. Reitz (1971) 17 Cal.App.3d 958, 909; Torres v. Xomox Corp. (1996) 49 Cal.App.4th 1, 21.) Here, Union Carbide gave no warning to the purchasers of the raw asbestos. Thus, the mere fact that Union Carbide and the “sophisticated intermediaries” to whom it sold raw asbestos failed to give warnings to Stewart does not absolve Union Carbide of liability.
If you need a copy of the opinion or would like to discuss these issues please contact us.
|
