Iowa Court of Appeals Bars Claims Against Asbestos Defendants for Products Made or Sold by Third Parties

​The Iowa Court of Appeals affirmed a district court’s decision that Iowa’s Section 686B.7(5), enacted in 2017, barred claims against a premises owner and installer of asbestos products. The statute provides: “A defendant in an asbestos action or silica action shall not be liable for exposures from a product or component part made or sold by a third party.”

In Beverage v. Alcoa, Inc., decedent worked many years inside an asbestos-containing aluminum plant. Decedent’s family brought asbestos-related claims against premises owner Alcoa Inc. and insulation contractor Iowa-Illinois Taylor Insulation, Inc. Both defendants filed motions for summary judgment arguing that Section 686B.7(5) provided them immunity.

The District Court focused on whether the asbestos-containing insulation used at the premise and any component parts were “made or sold by a third party.” The court noted that the premises defendant never manufactured, produced, or sold an asbestos-containing product or component part, it was merely a consumer of asbestos insulation provided by a third party (the insulation contractor). And while the insulation contractor sold products containing asbestos, the insulation contractor purchased these asbestos products from other sources. Because any asbestos-containing products the insulation contractor installed at the premise or sold to the premise were products or component parts made or sold by third parties, Section 686(B).7(5) granted the defendants immunity, and the court dismissed the claims against them.

On appeal, Plaintiffs argued that the district court misinterpreted Section 686(B).7(5).

First, Plaintiffs argued that the word “defendant” in Section 686(B).7(5) does not mean “any entity sued in an asbestos suit,” but rather “one that makes or sells an asbestos product.” The court disagreed, holding that the words of Section 686(B).7(5) show the legislature’s clear intention to limit asbestos litigation by immunizing a substantial range of defendants, not all of whom manufacture anything.

Plaintiffs next argued that Section 686(B).7(5) established a “bare metal defense,” a common defense raised by manufacturers of equipment that used asbestos, and that because the bare metal defense applies to product manufacturers, the district court should have interpreted Section 686(B).7(5) to only protect product manufacturers. The court disagreed, holding that the immunity available under Section 686(B).7(5) is not the same as that available under “bare metal” defenses, and that if the legislature intended merely to codify the common law defenses, it would have so stated.

Plaintiffs also argued that Section 686(B).7(5) should only apply to product manufacturers because, under the district court’s interpretation, Section 686(B).7(5) would eliminate the liability of premises owners and product suppliers, and interpretation that is “absurd in the extreme.” The court disagreed, pointing out that Section 686(B).7(5) did not create a general grant of immunity for either group. The court further held that it saw nothing absurd with asbestos litigation refocusing on culpable targets, such as asbestos manufacturers.

Full disclosure: GRSM’s Beverly Bond served as national counsel for Alcoa in this matter.

While this decision is welcome news for many asbestos defendants in Iowa, the debate over the bare metal defense’s viability remains alive and well at the state court level in other jurisdictions as we advance into 2021.