California Limits Take-Home Claims and Affirms That “Substantial Factor” Means More than “Possible”

A California appellate court has sided with the defendants in an alleged take-home asbestos exposure case. Petitpas v. Ford Motor Company (July 5, 2017, B245027) —Cal.App.5th—presents many strong arguments for defendants, including what is required to show that an asbestos product was a substantial factor in causing asbestos disease.

Plaintiffs Joseph and Marline Petitpas alleged that Joseph Petitpas’ work at a gas station owned by Exxon and at various construction sites brought home asbestos which injured Ms. Petitpas.

I.  Take Home Exposures – Duty Not Extended

While the appeal was pending, the California Supreme Court issued its opinion in Kesner v. Sup. Ct. (2016) 1 Cal.5th 1132. Kesner allowed take home cases to be brought in California. However, it limited those cases to household members, reasoning that “persons who live with the worker and are thus foreseeably in close and sustained contact with the worker over a significant period of time” are protected. (Id. at 1154-1155.) In Kesner, the injured person was the nephew of a worker who lived for periods of time with his uncle, who manufactured brake linings. In Petipas, Plaintiffs conceded that the parties did not live together when Mr. Petitpas worked at the Exxon station (they were married later). The court in Petipas declined Plaintiffs’ invitation to extend the duty in take home cases to non-household members. “Inviting a trial to determine whether a non-household member’s contact with the employee was ‘similar to the status of a household member’ appears to be exactly what the Supreme Court was attempting to avoid with this bright-line rule.”

II.  Substantial Factor – Probable vs. Possible

To meet their burden in an asbestos case, plaintiffs must show that there is exposure to a defendant’s product that was “in reasonable medical probability” a substantial factor in bringing about the injury. (Rutherford v. Owens-Illinois, Inc. (1997) 16 Cal.4th 953, 982.) Many factors are considered to determine if the exposures are substantial factors, including frequency, proximity and duration of the exposures. The evidence in this case merely suggested it was possible that Mr. Petitpas brought asbestos dust home on his clothing from his inspection of construction jobs. He only did this for an hour a day and returned to his office for the remainder. Neither Plaintiff testified that Ms. Petitpas shook out his clothes when washing them. Further, it was merely possible she was exposed when visiting the construction sites, because there was no active construction occurring and there was no visible dust. Mere presence of asbestos at a site was simply not sufficient to show that asbestos-containing products used at these sites was a substantial factor in causing Ms. Petitpas’ mesothelioma.

III.  Replacement Parts Doctrine – Applies to Defect as Well as Failure to Warn Claims

Ford submitted a jury instruction which stated that it was not liable for exposure to replacement brakes, clutches and gaskets on Ford vehiclesthat were manufactured by parties other than Ford. This instruction was based upon O’Neil v. Crane Co. (2012) 53 Cal.4th 335. The O’Neil decision established that a product manufacturer cannot be held liable in strict liability or negligence for harm caused by another manufacturer’s product “unless the defendant’s own product contributed substantially to the harm, or the defendant participated substantially in creating a harmful combined use of the products.” Plaintiffs objected that O’Neil only applied to failure to warn cases, and that Ford’s design was defective because “it is a Ford design that called for the installation and inclusion of asbestos-containing brake products, whether or not they were made by Ford or anyone else.” The court rejected Plaintiffs’ argument because they did not present any evidence that the Ford cars were unable to use non-asbestos parts or were somehow incompatible with non-asbestos parts.

IV.  Jury Instructions in Asbestos Cases

Plaintiffs also argued that the trial court committed error by allowing jury instructions CACI Nos. 430 and 435 to be read to the jury. Both of these instructions give the jury direction on what a “substantial factor” is under California law.  CACI No. 430, the generally applicable instruction, defines “substantial factor” as a factor that “contributed to the harm.” This Use Notes for this instruction state that it should not be read in asbestos related cancer cases.  However, Exxon argued that CACI No. 430 was applicable to it because it was a premises liability defendant, not a product manufacturer or supplier. CACI No. 435 is the instruction for asbestos cancer cases.

CACI No. 435, applicable in asbestos cases only, defines “substantial factor” as one that “contributed to the risk,” not just the harm. Plaintiffs argued that using CACI No. 430 confused the jury and imposed a greater burden on them.

The court allowed both instructions to be read. “That the Use Notes caution against giving the more general CACI No. 430 in a mesothelioma case, when the more specific instruction CACI No. 435 is more applicable, does not support a conclusion that it was error to give both instructions. CACI No. 430 is a correct statement of the law relating to substantial factor causation, even though, as Rutherford noted, more specific instructions also must be given in a mesothelioma case.”

V.  No Studies Show Take-Home Hazards from Brake Repair

The jury found that Exxon did not know, and should not have reasonably known, that Mr. Petitpas’ work at the gas station put Ms. Petitpas at unreasonable risk.

Plaintiffs argued that because the management at Exxon refineries knew about the hazards of asbestos, their agents at service stations also knew. The court did not agree with this argument. Since the jury only heard evidence that conditions at other locations posed a risk to other classes of employees (which Exxon knew about), the jury properly found that Exxon did not know about the risks at its service stations.

The Petitpas court went so far as to suggest that had the jury found otherwise, it would have to be reversed. Dr. Castleman admitted that there were no studies “of any statistical power…that speak of the mesothelioma risk of mechanics that do brake repair work” and that no such studies exist today. Plaintiff’s expert Dr. Horn also conceded this fact. Therefore, the court reasoned, “There was no evidence linking asbestos exposure to occasional bystanders who were near automotive workers as they did brake work.” The court’s conclusion in Petitpas can and should be used as an argument in all brake take-home repair cases.

This decision bodes well for defendants challenging plaintiffs’ often broad and sweeping allegations in asbestos cases.

California Court Concludes Sarcastic Comment Sufficient For Punitive Damages

Earlier this month, a California appellate court ruled that an offhand remark by a corporate employee may be sufficient to award punitive damages. The court also addressed issues related to the “every-exposure” theory, without wading directly into the every-exposure debate.

In Phillips v. Honeywell International Inc. (March 17, 2017. Case F070761) — Cal.App.5th –, the court held that the trial court properly admitted a 1966 letter from an employee who was not an officer, director, or managing agent. The letter is well known (described in the opinion as “infamous”) in asbestos litigation as “the E.A. Martin letter,” and is the frequent subject of in limine motions. Martin was a purchasing director, and he was writing to one of his asbestos suppliers, sarcastically addressing an article in Chemical Week magazine: “[I]f you have enjoyed a good life while working with asbestos products why not die from it. There’s got to be some cause.”

The court held that the letter served as circumstantial evidence that the company was aware that asbestos could be a potential health hazard years before it ceased using asbestos, and was sufficient to support an award of $3.5 million in punitive damages (of a total $5.8 million award).

The admittance of the letter has broad implications, suggesting that any stray remark – even a sarcastic expression of confidence in a product ingredient by a corporate employee who was not in the upper echelon – can serve to support a finding of massive punitive damages.

As the California court noted, the same letter has been both admitted and rejected by multiple other courts. For example, an Illinois appellate court pronounced the letter “a revealing historical anecdote that may give us insight into the thinking within the asbestos industry in 1966, but it was irrelevant. A persuasive argument can also be made that even if it had some modest relevance, it was inflammatory, and whatever probative value it had was outweighed by its prejudicial effect.” (Dukes v. Pneumo Abex Corp. (2008) 386 Ill.App.3d 425, 439.)

In an unpublished portion of the decision (meaning it may not be cited as precedent in California, though it may be citable elsewhere), Phillips also addressed the split in authority regarding the “every-exposure” (a.k.a. “no safe dose”) theory versus the “every-identified-exposure” theory in asbestos litigation. Under the every-exposure theory of causation, “every exposure to asbestos fibers is a substantial factor in causing disease, regardless of fiber type or dose, so long as the fibers are traceable to a product and are not merely ‘background’ fibers found in the ambient air.” The same defendant lost a challenge to that theory in Davis v. Honeywell International Inc. (2016) 245 Cal.App.4th 477, and sought to have the Phillips court part ways with Davis. Instead, the Phillips court found that the expert had espoused the subtly different “every-identified-exposure” theory.

In reaching this conclusion, the Phillips court quoted an Ohio decision approvingly: “Although some courts have rejected the ‘each and every exposure’ theory, others have distinguished testimony suggesting a de minimis exposure to asbestos could cause mesothelioma from testimony that each significant exposure to asbestos could be a cause.” The California court found that this theory was “consistent with California law addressing proof of causation in asbestos-related cancer cases,” in that it considered only significant and identifiable exposures in determining the risk of the disease.

California Supreme Court Finds Duty in Take Home Exposure Cases

12-5On December 1, 2016, the California Supreme Court ruled that premises owners and employers owed a duty to prevent take-home asbestos exposure to those in an employee’s household. The court declined to carve out an exception to the general duty imposed by California statute (Civ. Code, § 1714) on every person to exercise reasonable care for the safety of others. While the decision does not specifically cover take-home claims against product manufacturers, the rationale of the decision suggests that they too will be subject to take-home liability. Recognizing a duty to bystanders will expand the class of persons who may pursue employers and premises owners for asbestos exposure claims. The court found no inconsistency with its opinion and a number of other jurisdictions that have a “no duty” rule. One  distinguishing fact is that by the time exposure is alleged to have occurred in the 1970’s information and regulations regarding the dangers of take-home exposure would have been generally known to employers and premises owners, as the result of 1972 OSHA regulations and otherwise.

The court’s ruling came in two consolidated companion cases. In Kesner, plaintiff alleged he was exposed to asbestos when he spent an average of three nights per week at his uncle’s house in the 1970’s. His uncle, an employee of Pneumo Abex, LLC (“Abex”), worked in a plant where brake shoes were manufactured with asbestos fibers that were released during the manufacturing process, and it was alleged that the uncle brought the fibers home on his work clothes. Plaintiff was diagnosed with mesothelioma and he sued Abex. The Kesner appellate court reversed Abex’ nonsuit based upon prior California holding (Campbell v. Ford Motor Co.) that the employer had no duty to a bystander. In the companion case Haver, the decedent’s heirs claimed decedent was exposed to asbestos by her former husband, who was allegedly exposed to asbestos from pipe insulation and other tools while employed as a fireman and hostler in the early 1970’s. Decedent was diagnosed with mesothelioma. The Haver appellate court affirmed the trial court’s order sustaining defendant’s demurrer, relying upon Campbell and distinguishing Kesner on the ground that Kesner sounded in negligence whereas the Havers’ claims rested on a premises liability theory.

The Supreme Court held that in both instances, a reasonable employer should have known that asbestos presented risk of harm in the workplace and that it was foreseeable its employees would travel outside the workplace, particularly to their homes. “The relevant intervening conduct here – that workers returned home at the end of the day and, without adequate precautions, would bring asbestos dust home – is entirely foreseeable.” Thus, the exposure was foreseeable and duty attached.

The court did, however, limit the duty to “household” members, and not just anyone with whom a worker might come into contact (e.g. carpools, restaurant workers, or bus passengers). “We hold that an employer’s or property owner’s duty to prevent take-home exposure extends only to members of a worker’s household, i.e., persons who live with the worker and are thus foreseeably in close and sustained contact with the worker over a significant period of time.” The court stopped short of limiting the duty to “immediate family members” and instead applied it to “household members”, an acknowledgement of bonds which may be found in non-traditional and quasi-familial living arrangements. The court also explicitly acknowledged that “… a finding of duty is not a finding of liability. To obtain a judgment, a plaintiff must prove that the defendant breached its duty of ordinary care and that the breach proximately caused the plaintiff’s injury and the defendant may assert defenses and submit contrary evidence on each of these elements.”

Government Contractor Defense Victory in California

A recent California decision describes a set of facts in which the government contractor defense can be successfully applied. Such circumstances have been few and far between.

In Kase v. Metalclad Insulation Corp., the appeal was from an order by San Francisco’s soon-to-be Presiding Judge Teri Jackson granting summary judgment to defendant.

12-2Mr. Kase claimed exposure to asbestos-containing insulation products while working on US Navy nuclear submarines in the 1970’s. The court pointed out that unlike other defendants who have in the past unsuccessfully attempted to assert the defense, Metalclad did not design or produce a piece of hardware or equipment. Instead, Metalclad was a broker of Unibestos. The court finds the government contractor defense was properly asserted for Metalclad while simultaneously acknowledging other decisions that have denied its application for equipment manufacturers. We are left with the predicament wherein a broker who distributes Unibestos can assert the government contractor defense, whereas an equipment manufacturer who has its products insulated with Unibestos cannot. The court notes that the record demonstrated that the Unibestos product at issue was never in the possession of Metalclad. Instead, Metalclad had only arranged for its delivery to the shipyard.

The opinion is lengthy, 28 pages, and includes several points benefitting potential government contractor defendants, including:

  • There is no “off the shelf” limitation to the application of the defense.
  • Products “incidentally sold commercially” may still qualify as military equipment.
  • Insulation specifications required, first explicitly and later impliedly, the use of asbestos. The court ruled that that if only asbestos will fulfill the performance requirements, then it is not necessary that the government specifications explicitly use the word asbestos. “Performance requirements can mandate a design choice, and the uncontroverted evidence is that it did so in this case.”
  • There was no duty to warn as the Navy “was well aware of the potential hazards of asbestos.”
  • Similarly, although this case did not involve “back and forth” negotiations characteristic of other successful government contractor defenses, that not necessary. “We recognize this is not a case involving substantial “back and forth” between a government agency and a contractor designing a unique piece of equipment, such as an aircraft or transport vehicle. [Citations omitted] No case involving that scenario, however, has involved the decades of naval studies and investigations, and the history of naval specifications, unique to the universe of asbestos cases.”
  • Unibestos had asbestos warnings on its insulation products not later than 1968.

While this decision is certainly good news for Metalclad and other similarly situated defendants, other courts may limit it to the specific facts of this case. It seems odd that a company that arranges for the delivery of boxes of Unibestos to the shipyard is protected from liability, while the company that ships its pumps to the same shipyard with comparatively miniscule rings of asbestos containing packing inside their pumps nevertheless is frequently denied the same defense. Perhaps arguing this inconsistency will gain some traction for government contractor equipment manufacturers in the future.

California Greenlights “Jurisdiction by Joinder” in Mass Tort Cases

9-1The California Supreme Court earlier this week issued an opinion that, in the words of the dissent, allows for “jurisdiction by joinder.” (Bristol-Myers Squibb Co. v. Superior Court (Anderson), Case No. S221038.) Plaintiffs with claims arising wholly outside California, against non-California defendants, may nevertheless be entitled to jurisdiction in a California court. The keys appear to be (a) whether the claims are similar to those of California residents (b) who are also plaintiffs in the suit (c) against a defendant that conducts significant activity in California as well as elsewhere. While Bristol-Myers most directly applies to large entities in mass tort cases, its rationale could well extend to any lawsuit in which a product was sold or activity conducted in multiple states. The 4-3 decision may also be the subject of a petition for certiorari to the United States Supreme Court.

“Bristol-Myers Squibb Company (BMS), a pharmaceutical manufacturer, conducts significant business and research activities in California but is neither incorporated nor headquartered here.” Eight California lawsuits were filed against it related to BMS’s drug Plavix. Plaintiffs were 86 California residents and 592 nonresidents. None of the residents purchased the drug in or from California, or had other relevant contacts with the state.

The opinion recognizes that “BMS’s business contacts in California are insufficient to invoke general jurisdiction,” because under Daimler AG v. Bauman (2014) 571 U.S. __ , 134 S.Ct. 746, 187 L.Ed.2d 624 that is restricted to a corporation’s state of incorporation or principal place of business. (We have blogged about Daimler and its progeny before: California Court rules no jurisdiction over foreign parent corporations; No in state dealings for years – no jurisdictionOut of state defendant? Out of state exposure? File suit somewhere else; Registered in Delaware Is Not At “Home” There; and A More Personal Touch: Challenge to Madison County Jurisdiction.) Bristol-Myers held, however, that “the company’s California activities are sufficiently related to the nonresident plaintiffs’ suits to support the invocation of specific jurisdiction.”

The court found that it was undisputed that there was specific jurisdiction over the California plaintiffs’ claims, and found that there should be jurisdiction over the nonresidents’ claims as well because “BMS sold Plavix to both the California plaintiffs and the nonresident plaintiffs as part of a common nationwide course of distribution.”

The California activities that Bristol-Myers found “related” to the nonresident plaintiffs’ claims: “BMS’s extensive contacts with California, encompassing extensive marketing and distribution of Plavix, hundreds of millions of dollars of revenue from Plavix sales, a relationship with a California distributor, substantial research and development facilities, and hundreds of California employees” is enough for California courts to “exercise specific personal jurisdiction over nonresident plaintiffs’ claims in this action, which arise from the same course of conduct that gave rise to California plaintiffs‘ claims: BMS’s development and nationwide marketing and distribution of Plavix.”

Bristol-Myers pointed out that the court had previously “adopted a sliding scale approach to specific jurisdiction,” such that that “the more wide ranging the defendant‘s forum contacts, the more readily is shown a connection between the forum contacts and the claim.” Specific jurisdiction is thus proper in this case because “BMS’s contacts with California are substantial and the company has enjoyed sizeable revenues from the sales of its product here — the very product that is the subject of the claims of all of the plaintiffs.”

The court identified several California interests in the joint litigation. One is that “evidence of the injuries allegedly suffered by the nonresident plaintiffs may be relevant and admissible to prove that Plavix similarly injured the California plaintiffs,” so “trying their cases together with those of nonresident plaintiffs could promote efficient adjudication of California residents’ claims.” Similarly, the court was concerned that “separating the nonresident plaintiffs from the resident plaintiffs and forcing the nonresidents to sue in other states” could result in “delays in the California proceedings that would be created by the litigation and appeals of discovery and factual conflicts in the various other forums.” A further, case-specific reason was that “California also has an interest in regulating the conduct of BMS’s codefendant, McKesson Corporation, which is headquartered in California, as a joint defendant with BMS.”

As the dissenting opinion stated: “The majority expands specific jurisdiction to the point that, for a large category of defendants, it becomes indistinguishable from general jurisdiction.” The dissent argued that “mere similarity of claims is an insufficient basis for specific jurisdiction. The claims of real parties in interest, nonresidents injured by their use of Plavix they purchased and used in other states, in no sense arise from BMS’s marketing and sales of Plavix in California, or from any of BMS’s other activities in this state.” The dissent quoted with approval a law review article on the Court of Appeal’s decision: “The claims of the California and nonresident plaintiffs are merely parallel.”

Although the majority opinion was couched in terms of “the particular circumstances of this case,” the dissent looked to the broader precedent being set.

“[T]he majority notes that BMS maintains some research facilities in California, although the majority concedes Plavix was not developed in those facilities. … This second ground of relatedness is both illogical and startling in its potential breadth. Because BMS has performed research on other drugs in California, claims of injury from Plavix may, according to the majority, be adjudicated in this state. Will we in the next case decide that a company may be sued in California for dismissing an employee in Florida because on another occasion it fired a different employee in California, or that an Illinois resident can sue his automobile insurer here for bad faith because the defendant sells health care policies in the California market?”

“As California holds a substantial portion of the United States population, any company selling a product or service nationwide, regardless of where it is incorporated or headquartered, is likely to do a substantial part of its business in California. Under the majority’s theory of specific jurisdiction, California provides a forum for plaintiffs from any number of states to join with California plaintiffs seeking redress for injuries from virtually any course of business conduct a defendant has pursued on a nationwide basis, without any showing of a relationship between the defendant’s conduct in California and the nonresident plaintiffs’ claims. The majority thus sanctions our state to regularly adjudicate disputes arising purely from conduct in other states, brought by nonresidents who suffered no injury here, against companies who are not at home here but simply do business in the state.”

The dissent took issue with other reasons proffered by the majority. While “[t]he majority argues that taking jurisdiction over the nonresidents’ claims furthers a California interest because evidence of their injuries may be admissible to help the California plaintiffs prove Plavix was a defective product,”  the dissent pointed out that “admissibility of other injuries does not depend on joinder of the other injured person.” The majority thought that joint litigation would help the California plaintiffs, but the dissent pointed out that there are many other Plavix suits in other courts around the country. “Whether or not real parties’ claims are heard together with those of the California plaintiffs, inefficiency and the potential for conflicting rulings will exist so long as actions are simultaneously pending in several state and federal courts….No mechanism exists for centralizing nationwide litigation in a state court; there is no means by which pending actions in Illinois courts, for example, can be transferred to a California court.”

The dissent also answered the question, what’s the superlative of “red herring?”

“Finally, the majority asserts that California’s interest in regulating the conduct of codefendant McKesson Corporation (McKesson), a pharmaceutical distributor headquartered in California, justifies adjudicating real parties’ claims against BMS in a California court.…Of all the majority’s red herrings, this is perhaps the ruddiest.” Because of course the question is jurisdiction against Bristol-Myers, not the co-defendant (and there was question as to its role anyway). Research indicates this is the first use of “ruddiest” in a reported California decision. It may not be the last.

As stated above, while Bristol-Myers most directly applies to large entities in mass tort cases, its rationale could well extend to any lawsuit in which a product was sold or an activity conducted in multiple states. The most significant limitation appears to be that a nonresident plaintiff still may not be able to challenge a nonresident defendant in California courts alone; the nonresident needs to find California plaintiffs with similar claims. In any event, counsel who have been advising clients that the Daimler decision forecloses claims in California courts based on general jurisdiction should re-examine that position in light of the Bristol-Myers ruling on specific jurisdiction.

California Adopts “Sophisticated Intermediary” Defense

Earlier this week, the California Supreme Court formally adopted the “sophisticated intermediary” defense for product suppliers. The court significantly restricted applicability of the defense, however, and ruled that there was insufficient evidence in this case that Johns-Manville qualified as such an intermediary.

5-24Webb v. Special Electric Co., Inc. articulated the defense as follows: “a [product] supplier may discharge its duty to warn end users about known or knowable risks in the use of its product if it: (1) provides adequate warnings to the product’s immediate purchaser, or sells to a sophisticated purchaser that it knows is aware or should be aware of the specific danger, and (2) reasonably relies on the purchaser to convey appropriate warnings to downstream users who will encounter the product.”

Perhaps the most significant hurdle to use of the defense in the future is the requirement that “a product supplier must show not only that it warned or sold to a knowledgeable intermediary, but also that it actually and reasonably relied on the intermediary to convey warnings to end users.”

The challenge posed by that requirement was exemplified here, where the Supreme Court ruled that Special Electric, a 2-person broker of raw crocidolite asbestos, had a duty to warn asbestos behemoth Johns-Manville and the downstream users of Johns-Manville products that incorporated Special Electric-brokered raw material. In part, this reflected a welcome understanding about the divergent toxicities of the different minerals classified together as asbestos. “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 the crocidolite asbestos Special Electric supplied.”

Webb identified four other reasons why the evidence did not justify the trial court’s decision to grant a defense JNOV in the face of a jury verdict finding negligence.

  1. “The evidence is disputed about whether Special Electric consistently provided warnings to Johns-Manville during the relevant time frame.” Note that it is not just “warnings,” but “consistent warnings.”
  2. “[P]laintiffs 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. If the jury credited this evidence, it may have found it unreasonable for Special Electric to believe Johns-Manville was so sophisticated that a warning about the particular dangers of crocidolite asbestos was not called for.”
  3. Further, “the record does not establish as a matter of law that Special Electric actually and reasonably relied on Johns-Manville to warn end users like William Webb about the dangers of asbestos. We recognize that direct proof of actual reliance may be difficult to obtain when, as in the case of latent disease, the material was supplied to an intermediary long ago. However, actual reliance is an inference the factfinder should be able to draw from circumstantial evidence about the parties’ dealings.”
  4. “[T]he jury could have reasonably determined that any reliance on Johns-Manville would have been unjustified. Plaintiffs presented testimony from a former Johns-Manville employee criticizing the company’s handling of asbestos warnings and asserting it had failed to warn its own workers about the hazards of asbestos before the mid-1970s.”

While this evidence may be slim, it was enough to support the jury’s finding of negligence and thus to overrule the trial court’s grant of JNOV to the defense. The evidence in the case may also have been sufficient to support a jury finding that Special Electric was entitled to rely on the sophisticated intermediary defense, but the issue was presented only to the court and not to the jury.

Webb overruled an earlier Court of Appeal decision that had rejected the sophisticated intermediary defense on the rationale that “that doctrine, where it applies at all, applies only if a manufacturer provided adequate warnings to the intermediary.” Webb ruled that “[t]his assertion cannot be reconciled with our analysis in Johnson [v. American Standard, the key California “sophisticated user” decision].Insofar as it expresses a different view, Stewart v. Union Carbide Corp. is disapproved.” So in at least some cases a defendant that provides no warnings can rely on the sophisticated intermediary defense.

A footnote that is off the main point is nevertheless a troubling sign for product liability defendants, because it appears to allow very speculative evidence about whether a plaintiff ever encountered a defendant’s product. “Plaintiffs introduced evidence that Webb was exposed to dust from Johns-Manville products containing trace amounts of crocidolite at roughly the same time Special Electric was supplying crocidolite asbestos to Johns-Manville. While evidence of the link could be stronger, it is nonetheless sufficient for the jury to have found that Special Electric’s asbestos was a substantial factor in causing Webb’s mesothelioma.” “[E]vidence of the link could be stronger” is an understatement. This footnote portends both an easier path for plaintiffs to “prove” exposure, and a court not willing to put much “substantial” in “substantial factor.”

Ninth Circuit Rejects Plaintiffs’ “Every Exposure Counts” Theory

4-4A Ninth Circuit panel including former Chief Judge Kozinski last week rejected the “every exposure” theory advanced by many plaintiff expert witnesses, who thereby try to impose liability on defendants responsible for only vanishingly small amounts of asbestos.

McIndoe v. Huntington Ingalls Inc. framed the question in terms of the substantial factor test. “Absent direct evidence of causation, a party may satisfy the substantial-factor test by demonstrating that the injured person had substantial exposure to the relevant asbestos for a substantial period of time.” The Ninth Circuit found this evidence lacking, thereby justifying summary judgment to defendants.

At most the heirs have provided evidence that McIndoe was “frequently” present during the removal of insulation aboard the Worden and was present 20–30 times during such removal aboard the Coral Sea. But, as the district court found, even if McIndoe was around asbestos dust several times, his heirs presented no evidence regarding the amount of exposure to dust from originally installed asbestos, or critically, the duration of such exposure during any of these incidents.

Plaintiffs “argue[d] that evidence of prolonged exposure is not needed, because they presented the opinion of Dr. Allen Raybin—a medical expert who asserted that every exposure to asbestos above a threshold level is necessarily a substantial factor in the contraction of asbestos-related diseases.”

Both the Ninth Circuit and the district court rejected this argument on the ground that the “every exposure” theory of asbestos causation” amounts “to reject[ing] the substantial-factor test as a whole.” Plaintiffs’ expert “did not make distinctions between the overall dose of asbestos McIndoe breathed aboard the ships and that portion of such exposure which could be attributed to the shipbuilders’ materials,” and his “testimony aims more to establish a legal conclusion—what general level of asbestos exposure is required to show disease causation—than to establish the facts of McIndoe’s own injuries.” Thus, the defendant shipbuilders were entitled to summary judgment.

McIndoe was decided under federal maritime law, and so may not be directly applicable in state law cases. It joins a long list of cases that have rejected the every exposure theory, but interestingly comes mere weeks after a California appeals court allowed every exposure testimony. McIndoe’s emphasis on the amount and duration of exposure is consistent with most decisions on point, and may offer an additional reason for California defendants to seek to remove cases to federal court.

In another holding, McIndoe found that naval warships do not constitute “products,” so that only negligence and not strict liability was available to plaintiffs. Arguably the holding on required evidence of substantial factor causation would be the same under both theories.

California Chocolates: Labelled for Lead?

4-2Chocolate is bad for you. But not for the reasons you thought.

Don’t touch that left over chocolate Easter Bunny. Step away from that Hershey’s chocolate bar, and don’t even think of buying a box of See’s chocolates for your mother for Mother’s Day. That’s right, all these delights, and many others, are bad for your health. But not for the reasons that probably first comes to mind.

As recently reported by CNN, a California Safe Drinking Water and Toxic Enforcement Act (affectionately referred to as Proposition 65 Prop. 65 in California) bounty hunter with the biblically-themed name of As You Sow has announced that it has served notice on numerous candy companies of impending litigation due to their sale in California of candies with impermissibly high levels of lead and cadmium. As You Sow reports that they have tested numerous candy products and found at least 18 to have excess levels of lead or cadmium.

Those of us practicing in California have for years dealt with lawsuits brought against manufacturers and distributors of innumerable products because they purportedly contained levels of chemicals labeled as hazardous – in excess of the “Maximum Allowable Daily Level” or “No Significant Risk Level” – as identified by the state regulators tasked with applying Prop. 65. When one manufactures or distributes a product found to have such an excess level, the options are to label the products with a “Prop 65 warning,” reformulate the products, or stop selling them in California. Failing to do so results in litigation wherein entities such as As You Sow acting as “private attorneys general” seek an award of civil penalties, injunctive relief and an award of their own attorneys’ fees.

As lead has long been acknowledged to create hazards to some exposed individuals at certain exposure levels, lead has frequently been the target chemical in Prop 65 cases. The alleged exposures can come from ingesting lead or from “dermal absorption” of lead. We have seen cases about lead in women’s jewelry, and lead in herbal supplements. Since lead is a naturally occurring mineral in the Earth’s crust, it is everywhere. And plants that take their nourishment from the soil of the Earth collect measurable levels of lead. Lead is in fruits and vegetables, nuts and berries, and yes even in chocolate. The level of lead content triggering regulatory action in California is 1 part per million.

The result of the frequent litigation over Prop 65 in California has been the proliferation of Prop 65 warnings. California residents see Prop 65 warnings not only on numerous products, but even posted in the lobbies of hotels and office buildings. Californians can rest easier knowing that concerned citizens like As You Sow are working hard to ensure that we will see a Prop 65 warning on some future date on the door at See’s Candies, or on the label of a Hershey Bar or on the box of Godiva truffles.

Expanded Acceptance of Custom & Practice in Strict Liability Cases

In California, the “consumer expectations” theory of design defect has been the bane of defense attorneys for years. I cannot tell you how many times we have been unable to persuade the court that it should not allow plaintiffs to pursue this theory. Further, in cases applying either this or the companion strict liability test, risk/benefit, courts regularly exclude virtually all evidence in support of the product design. In a recent opinion from the Court of Appeal for the State of California, Second Appellate District, the court has offered a ray of hope on these very issues.

3-29In Kim v. Toyota Motor Corp., plaintiffs claimed that their Toyota Tundra was defective for failing to incorporate an Electronic Stability Control (“ESC”) system. By motion in limine, plaintiffs sought to preclude any evidence “comparing the Tundra to competitor’s vehicles and designs.” The court interpreted this as a request to exclude “all evidence of custom and practice in the pickup truck industry.” Plaintiffs also sought to pursue the “consumer expectations” prong of strict product liability under California law, in addition to a risk/benefit analysis. The court surprised this commentator by affirming the determination by the trial court that evidence of industry custom & practice may be admissible under some circumstances in a risk/benefit case, and by affirming the decision of the trial court to preclude plaintiffs from pursuing consumer expectations.

The court proceeds through a lengthy analysis of California cases discussing strict liability and the admissibility of evidence of industry custom and practice in such cases. The court identifies two distinct lines of cases discussing the issue in the past (Titus v. Bethlehem Steel Corp. (1979) 91 Cal.App.3d 372 and its progeny on the one hand, and Howard v. Omni Hotels Management Corp. (2012) 203 Cal. App. 4th 403 and its progeny on the other). Remarkably, the court indicates that it is going to follow neither, and instead adopt a “middle ground”:

We are not persuaded either line of authority is entirely correct. Instead, we conclude that evidence of industry custom and practice may be relevant and, in the discretion of the trial court, admissible in strict product liability action, depending on the nature of the evidence and the purpose for which the party seeking admission offers the evidence.

The court explained that industry custom was valuable information.

Industry custom may reflect legitimate, independent research and practical experience regarding the appropriate balance of product safety, cost and functionality. (citations omitted) The parties in a strict products liability action probably will dispute whether and to what extent industry custom actually reflects such considerations and whether it strikes the appropriate balance. But that does not make the evidence inadmissible. Evidence of compliance with industry custom may tend to show that a product is safe for its foreseeable uses, while evidence of noncompliance with industry custom may tend to show that a product is unsafe for its foreseeable uses.

The decision points out that some elements of what is typically considered a negligence analysis have already crept into strict products liability. The court cites the example of comparative fault of the plaintiff, and the possible application of the sophisticated user defense in strict liability cases as evidence that such cases are not totally divorced from any negligence type analysis. That, in the court’s mind, justifies the admission of evidence of custom and practice in some strict liability cases.

Exactly when such evidence is going to be admissible, and when it will not, is not entirely clear. Kim holds that it will be up to the trial court to determine on a case by case basis when such evidence will be admissible. The decision discusses multiple examples of both when such evidence would be admissible and when it would not. This is going to provide fertile grounds for counsel to argue either side in future cases.

For example, Kim  ruled that evidence that competitors tried to produce safer designs that ultimately malfunctioned or were prohibitively expensive would be relevant “to the mechanical feasibility factor,” and evidence that competitors’ designs made products less efficient or desirable “would be relevant to the adverse consequences factor.” On the other hand, evidence that Toyota’s competitors did not offer ESC would be neither relevant nor admissible. Frankly, the logic of the examples cited by the court is not readily apparent to this commentator and causes one to expect that attorneys will be struggling with this issue in future cases.

Kim affirmed the trial court’s determination that this case was not suitable for a consumer expectations analysis. In essence, the court concluded that this assessment of an auto maker’s design decision to incorporate, or not incorporate, an “ESC” system, was simply beyond the keen of an ordinary consumer. This is very encouraging for the defense. The experience of this commentator has been that courts are typically reluctant to preclude plaintiffs from pursuing consumer expectations regardless of defense counsel pleas that the issues are too complex to fit within “consumer expectations.”

Kim’s discussion regarding evidence of custom and practice addresses “strict products liability” generally, and appears to be saying that evidence of industry custom and practice could be admissible in either a consumer expectations case or a risk/benefit case. But then again, Kim involved only risk/benefit as the trial judge had expressly precluded use of the consumer expectations prong. Thus, plaintiffs may argue that this case stands for the proposition only that evidence of custom and practice might be available in some risk/benefit cases, but does not support the proposition that such evidence is admissible in any consumer expectations case. This should encourage many plaintiff practitioners to do what they are already doing: pursue consumer expectations and forego risk/benefit.

California Court Rewrites Opinion on Asbestos Bankruptcy Trust Payments

As a result of Gordon & Rees’ amicus efforts (through California defense counsel organizations), along with those of other amici, the Court of Appeal issued an order modifying its opinion in Hernandezcueva v. E.F. Brady Co., Inc. (B251933) to delete a holding that asbestos bankruptcy trusts were subject to the “collateral source rule.” This is an important win for asbestos defendants in California.

Johns-Manville_BuildingAs we recently reported, the original version of the opinion held that asbestos bankruptcy trusts were “collateral sources,” meaning that the often substantial recoveries plaintiffs obtain from such trusts could not offset judgments against defendants. The order modifying the opinion deletes the reference to the collateral source rule entirely. It also refers to asbestos bankruptcy trusts as “joint tortfeasors” for purposes of offsetting judgments, and cites several cases holding that recoveries from asbestos bankruptcy trusts are explicitly approved as offsetting a judgment. Equally importantly, the reference to the trusts as “joint tortfeasors” confirms and continues asbestos defendants’ ability to ask juries to assign shares of liability to bankrupt manufacturers.

The other problems we noted with the opinion remain, and California Supreme Court review is still possible.