Is the MDL a “sophisticated misuser” of California law? California appellate court refuses to apply sophisticated user doctrine, rebukes Feds

A California appellate court has refused to apply the sophisticated user doctrine to bar the claims of the family of a career U.S. Navy shipyard worker who worked with asbestos-containing equipment at Navy shipyards between 1957 and 1989.  In Gottschall v. Crane Co., No. A136516 (First Appellate District, October 8, 2014), the First District reasserted the view that the sophisticated user defense under California law, is limited to situations where the end-user/plaintiff is knowledgeable does not apply where it is the purchaser/employer that is “sophisticated.”

The issue in Gottschall came up in a roundabout manner.  The plaintiff filed two wrongful death cases:  one in San Francisco Superior Court, which named the defendant and appellee Crane Co., and one in the U.S. District Court for the Northern District of California, naming six different defendants.  While Crane Co. continued to litigate in San Francisco, the federal case was subsequently transferred to the Eastern District of Pennsylvania, which was assigned to handle multidistrict asbestos litigation.  On December 8, 2011, the MDL (Robreno, J.)  granted a summary judgment motion filed by defendant General Dynamics Corp., holding that the U.S. Navy was a sophisticated user under California law, and therefore the plaintiffs could not maintain a claim.

Crane Co. filed its own summary judgment motion in San Francisco Superior Court predicated on this ruling, and arguing that the doctrine of collateral estoppel compelled the same result.   The court agreed, applied collateral estoppel and granted the motion.

The Court of Appeal reversed. First, it refused to apply the doctrine of collateral estoppel, finding that the sophisticated user issue was a “pure question of law,” and cited Jenkins v. County of Riverside (2006) 138 Cal.App.4th 593, 618 for the premise that collateral estoppel should not be applied in a way that prevents a California court from making a “proper interpretation” of its own law.  Then, in a stunning rebuke of the federal court, the Court of Appeal found that the MDL court’s “application of California law was wrong, as any reading of the evolution of California’s sophisticated user defense demonstrates.”

Gottschall distinguished the seminal case of Johnson v. American Standard, Inc. (2008)43 Cal.4th 56, on the ground  that the case involved a certified HVAC technician whose training and experience made him a sophisticated user, capable of understanding the hazards of the products with which he worked.  Then, the Court of Appeal relied on Stewart v. Union Carbide Corp. (2010) 190 Cal.App.4th 23 (2010) and Pfeifer v. John Crane, Inc. (2013) 220 Cal.App.4th 1270, both of which turned on the sophistication of the user – the individual using the products – and not the employer.  Thus, the First District stated plainly that “the Pennsylvania federal court was wrong in ruling as it did. Necessarily, the San Francisco Superior Court was wrong in holding that appellants were collaterally estopped by the Pennsylvania federal court’s decision.”

Though Johnson was initially received with much fanfare by the defense bar, Gottschall is only the latest in a string of decisions significantly limiting Johnson’s application.  While Gottschall classifies this as an “evolution of California’s sophisticated user defense,” the reality may be that the appellate courts, not the MDL, are the “sophisticated misusers” of Johnson’s holding.

Though Johnson did decide the issue of the application of the defense to a specific HVAC contractor, the decision makes clear that the point of the doctrine is to protect the manufacturer from the need to warn a sophisticated purchaser, and cites with approval Fierro v. International Harvester Co. (1982) 127 Cal.App.3d 862 and In re Related Asbestos Cases (N.D.Cal. 1982) 543 F.Supp. 1142, 1151.  Indeed, in In Re Asbestos, the court noted that “the Navy, as an employer, was aware of the dangers of asbestos as were defendants and that the Navy nonetheless misused the products, thereby absolving defendants of liability for failure to warn the Navy’s employees of the product dangers” (emphasis added).  The Supreme Court may yet get involved to clarify its application of Johnson.

California Decision Requires Product Identification Proof, But Nixes Sophisticated User Again

A California Court of Appeal recently issued an interesting decision affirming summary judgments for two asbestos defendants on product identification grounds, but reversing a summary judgment that had been awarded to a third defendant on “sophisticated user” grounds.

Collin v. CalPortland Co. (C063875, C065180, certified for publication July 30, 2014) affirmed summary judgment for CalPortland. The company sold two cements during the same time period: one called plastic cement that did not contain asbestos, and a second product called Colton gun plastic cement that did contain asbestos. Both were packaged and used similarly, the only difference being the one with asbestos was labeled Colton gun plastic cement. The plaintiff argued that even though he couldn’t recall the word “gun” on the packaging, the similarities between the two products were sufficient to raise an issue of fact. The court said this was speculative, rejecting the plaintiff’s product similarity argument. “Plaintiff does not claim that further discovery may produce evidence of exposure to Colton gun plastic cement, as opposed to the asbestos-free plastic cement. … [¶] Although a party may rely on reasonable inferences drawn from direct and circumstantial evidence to satisfy its burden on summary judgment, we do not draw inferences from thin air.”

Collin also affirmed summary judgment for Kaiser Gypsum. The plaintiff testified he saw Kaiser Gypsum pre-mixed joint compound at construction sites from the 1950s to 1995, but could not pinpoint any particular year. Kaiser submitted evidence that it started selling asbestos containing pre-mixed joint compound in 1959, began selling an asbestos-free joint compound in 1974, and stopped selling products with asbestos by early 1976. The plaintiff argued that based on probabilities, there was a greater than 50 percent chance that the joint compound he encountered contained asbestos, since Kaiser Gypsum used asbestos for the first 17 years of his work history (1959-1974) and asbestos-free only for a couple of years thereafter. Collin said this was speculative and rejected the plaintiff’s probability argument.

Collin reversed the grant of summary judgment to J-M Manufacturing Co. and Formosa Plastics Corporation USA (alleged alter egos and makers of Transite pipe). These defendants argued that the plaintiff was a sophisticated user because he owned two construction businesses; had obtained information from the Contractors State License Board that working with asbestos products could be hazardous; and from 1976-1980, he saw notices specific for asbestos posted at job sites. Collin found this insufficient to bar liability under the sophisticated user defense. Unlike the HVAC technician in Johnson v. American Standard, there was no evidence that the plaintiff had specialized knowledge or training with regard to Transite pipe, or ever read a material safety data sheet (MSDS) concerning Transite. There was no expert testimony that the plaintiff should have known of the dangers associated with Transite pipe, nor did the plaintiff recall ever seeing any warnings about the dangers of asbestos on any Transite pipe.

This is a hopeful decision on product identification grounds, and another in a series of California cases finding the sophisticated user defense inapplicable. It came from the Court of Appeal, Third Appellate District (Sacramento), which is a less frequent venue for asbestos cases than the First (San Francisco) and Second (Los Angeles) Districts.

Proposed Revision to California Sophisticated User Jury Instruction – Comment Period Closes Soon

The Judicial Council of California has the responsibility of crafting “standard” jury instructions recommended for use in all the trial departments in the state courts.  Since 2008, those instructions have included one for instructing the jury when the issue of a “sophisticated user” defense is posed.  Recently, the Judicial Council has presented for comment by the legal community a draft revision of this standard instruction.  The proposed revisions at first glance seem to require a more detailed showing from the defendants.  However, these proposed changes, in the author’s opinion, in practice would not reduce the ability of defendants to persuade the courts to give such an instruction.

The current instruction on sophisticated user reads (with some required information filled in) as follows:

Manufacturing Co. claims that it is not responsible for any harm to Plaintiff based on a failure to warn because Plaintiff is a sophisticated user of the product.  To succeed on this defense, Manufacturing Co. must prove that, at the time of the injury, Plaintiff, because of his particular position, training, experience, knowledge, or skill, knew or should have known of the product’s risk, harm, or danger.

The proposed revised instruction reads, with information inserted to complete the instruction, as follows:

Manufacturing Co. claims that it is not responsible for any harm to Plaintiff based on a failure to warn because Plaintiff is a sophisticated user of the product.  To succeed on this defense, Manufacturing Co. must prove that, at the time of the injury, Plaintiff, because of his particular position, training, experience, knowledge, or skill, knew or should have known all of the following:

  1. That [describe the risk posed by the product] breathing dust from the product could cause lung disease;
  2. That [describe the severity of the potential consequences] the lung disease could be disabling or fatal; and
  3. Any ways to use the product to reduce or avoid the risks that were known to the Manufacturing Co.

The “Sources and Authorities” relied upon are Johnson v. American Standard, Inc. (2008) 43 Cal.4th 56; Johnson v. Honeywell International, Inc. (2009) 179 Cal.App.4th 549; Stewart v. Union Carbide Corp. (2010) 190 Cal.App.4th 28; Pfeifer v. John Crane, Inc. (2013) 220 Cal.App.4th 1270; and Buckner v. Milwaukee Electric Tool Corp. (2013) 222 Cal.App.4th522.

The existing instruction is quite simple, nonspecific, and even vague.  If that original instruction is given, a defendant has a fair amount of latitude to argue a variety of facts.  But courts have been reluctant to give the instruction when plaintiffs argue that the necessary foundational facts have not been demonstrated.  Perhaps the courts are concerned that the existing instruction is in fact too broad and are thus reluctant to give the instruction, as the court can anticipate some defense counsel arguing that it is applicable even in those cases when not truly supported by the facts.

The proposed revision seems to require a more specific showing from the defendant.  And no doubt exactly how the brackets are completed in each case will be vigorously argued.  For No. 1, for example, plaintiffs’ counsel will no doubt argue that the bracket should include not just reference to lung disease, but either asbestosis, lung cancer or mesothelioma depending on the facts of each case.  Certainly it will be harder for a defendant to show that a sailor or shipyard worker knew about mesothelioma than to show that he knew that breathing lots of dust could be harmful.  No. 3 may be contested as well.  Defendants will argue that everyone knows the ways to avoid lots of dust (wet down the material, use a mask, have good ventilation, do not use compressed air), while plaintiffs will argue that more needs to be shown regarding specific precautions for asbestos dust.

With the proper questioning of a plaintiff at deposition, and perhaps using other evidence of what was known in the Navy and the shipyards at the relevant time, a defendant could present facts adequate to support each of the requirements whether using the old instruction or the new.  The question is whether the new version makes the task harder, easier, or does not change it.  My sense is that the relative burden on the defendant really does not change that much regardless of which version of the instruction is used.  It is also my sense that defense counsel will have a better chance of persuading a judge to give an instruction if the new version is approved and the defendant can make a showing that evidence has been produced to satisfy the three elements.  It just sounds more persuasive if one can argue that he or she has fulfilled the obligations of each of the enumerated subparts, rather than simply generally arguing that a showing has been made.

After allowing for a comment period, which ends Aug. 29 at 5 p.m., the Judicial Council will make its recommendations as to whether the proposed revisions should be adopted (the Council has indicated that the preferred way of receiving comments is in a Word file attached to an e-mail sent to  Concerned practitioners will be monitoring whether the instruction is to be modified, and if so, what impact the modifications may have in the trial courts.

Sophisticated User Defense Denied Again in California

Since the California Supreme Court recognized and applied the sophisticated user defense in Johnson v. American Standard, most other attempts to apply the defense have failed.

On July 1, a California Court of Appeal sitting in Sacramento declined to apply the sophisticated user defense despite evidence of likely knowledge on the part of the plaintiff-decedent.

In Collin v. CalPortland, the plaintiff-decedent claimed exposure to asbestos-containing cement pipe. The court described the evidence presented by defendants as to Loren Collin’s knowledge and sophistication thusly:

Here, J-MM and Formosa presented evidence that Loren worked in the construction trades beginning in 1954, and owned two construction businesses. Loren completed an apprenticeship in carpentry in 1963. He obtained a contractor’s license from the California Contractors’ State License Board in 1976. Loren received information from the contractors’ board beginning in 1976 that working with or around asbestos-containing materials could be hazardous to one’s health. During the 1976 to 1980 period, Loren saw notices specific to asbestos posted at jobsites.

However, the court found the sophisticated user defense inapplicable to defeat failure to warn claims as there was no evidence that Mr. Collin had specialized knowledge or training as to the particular products of the defendant.  It had not been shown that plaintiff knew the cement pipe in question contained asbestos, or that he had been provided training or documentation such as a material data safety sheet (MSDS) specific to the cement pipe. This distinguished the case from Johnson, said the Collin court, where there was an extensive record regarding the plaintiff’s specialized training and how he had received “and sometimes read” MSDS describing the hazards of the very chemical at issue.

The court did say that the standard remains an objective standard, rather than a subjective standard (so one looks at what Collin should have known, rather than what he actually knew), but it then held, “We cannot say from the evidence presented that the dangers of working with Transite were obvious at the time.”  Under Collin, it would not be obvious to someone who had been in the trades for 25 years, had owned and operated his own construction businesses, had been licensed by the state of California as a contractor, had been instructed about asbestos health hazards, and had seen notices posted at work sites about asbestos hazards, that working with asbestos-cement pipe (the common name for Transite) could be hazardous.  Perhaps in the next case, the moving defendants can succeed if they submit evidence that everyone in the trades knew that cement pipe frequently contained asbestos.

Another argument to be made, but not made in Collin, is that Mr. Collin and other employers are generally charged with maintaining a safe workplace for their employees. This includes the duty to be knowledgeable about the hazards in their workplace.  An employer who is legally obliged to be knowledgeable about workplace hazards, including asbestos, “should have known” about the hazards of asbestos-containing materials and which materials were, in fact, likely to contain asbestos.

Collin is, at least for now, an unpublished opinion.  Unpublished decisions cannot be cited to or by any California court.  They may nevertheless reflect current judicial thinking, like this decision, consistent with other recent decisions limiting the availability of the sophisticated user defense.  Further, unpublished California decisions are citable in most jurisdictions outside California.

Another California Decision Rejects Application of the Sophisticated User Doctrine

Continuing an unbroken string of disappointing “sophisticated user” appellate decisions, a California appellate court recently decided in Scott v. Ford Motor Co. (A137975, 3/26/14) that the “sophisticated user” defense did not apply to a career service station owner and mechanic.

Five years ago, the California Supreme Court “adopt[ed] the ‘sophisticated user’ doctrine and defense to negate a manufacturer’s duty to warn of a product’s potential danger when the plaintiff has (or should have) advance knowledge of the product’s inherent hazards. The defense is specifically applied to [those] who knew or should have ETT BLOG_mechanicknown of the product’s hazards, and it acts as an exception to manufacturer’s general duty to warn consumers.” (Johnson v. American Standard, Inc. (2008) 43 Cal.4th56, 61.) Since Johnson was issued, attempts by various California defendants to utilize the doctrine in asbestos cases have been universally unsuccessful at the appellate level. (E.g. Stewart v. Union Carbide Corp. (2010) 190 Cal.App.4th23; Rollin v. Foster Wheeler, LLC (2012) 2012 Cal.App. Unpub. LEXIS 579.)

Patrick Scott was a career service station owner and mechanic diagnosed with mesothelioma. The plaintiffs alleged that resulted from his exposure to asbestos while changing out brakes and clutches supplied by manufacturers including Ford Motor Company. Mr. Scott began working on cars as a teenager before opening his own service station in 1966, eventually owning four stations. He was a member of an automotive trade association and earned multiple certifications in the field. Ford argued that this qualified Mr. Scott as a “sophisticated user” of automotive parts who should be deemed to have been aware of the risks of asbestos exposure from repairing brakes and clutches, barring any liability to Ford. The trial court rejected this argument on Ford’s motion for judgment notwithstanding the verdict (JNOV), and the Court of Appeal affirmed.

The Scott decision found that Ford had “failed to prove the risks of automotive asbestos exposure should have been known by mechanics in the 1960’s and 1970’s.” “[T]here was no evidence that Scott, or others like him, were instructed in the claimed risks as part of their training.” Scott found it difficult to pinpoint “a scientific consensus regarding the dangers of automotive asbestos exposure” from the evidence at trial, given that even a defense expert testified that the conclusion of a major scientific conference in 1969 was that “brake linings are not a problem – or not a hazard.” Scott found that Ford itself did not place warnings about asbestos exposure on cartons of its own products until 1980, more than 14 years after Mr. Scott opened his first service station.

Ford suggested that if Mr. Scott was not a sophisticated user, then Ford itself had no duty to warn about the risks of asbestos exposure from its brakes. The court rejected this argument, both because the legal standards of constructive notice are different for product liability and the sophisticated user defense, and because as a factual matter what was “known or knowable” to Ford, a “large international business directly involved in the manufacture of the product,” is not the same as what was “known or knowable” to a local mechanic such as Mr. Scott. (Ford’s argument was not helped by being raised for the first time at oral argument.)

Takeaways from the Scott decision include:

1. Defendants need to develop a strong record during discovery of either (a) a plaintiff’s individual skills and training that allow the jury to determine his level of sophistication or (b) clear evidence regarding the sophistication of the trade or class of workers at the time of exposure.

2. Even where evidence of “sophisticated user” is not legally sufficient to bar liability completely, it may nevertheless support a finding of contributory negligence. In Scott, the jury found Mr. Scott 19 percent contributorily negligent (almost as big a percentage of liability as attributed to Ford, 22 percent).