We pause in
our maintenance and cure discussion (for one day) to address a new,
hot-off-the-press decision from the Supreme Court of the United States authored
by Justice Brett Kavanaugh: Air &
Liquid Sys. Corp. v. Devries, 2019 U.S. LEXIS 2087, No. 17-110 (March 19,
2019).
Facts
& Relevant Background
In the
underlying litigation, the plaintiffs (Kenneth McAfee and John DeVries) served
in the U.S. Navy at various period of time – McAfee from 1977 to 1986 aboard 2
vessels, and DeVries from 1957-1960 aboard one vessel. Each of these vessels utilized different
mechanical equipment that, in turn, required the use of asbestos insulation or
parts in order to operate correctly.[1] Obviously, we know from years of litigation
(and even more daytime television commercials) that (a) use of these products
can release asbestos fibers into the air and (b) if a person inhales or is
exposed to those fibers, they are put at a greater risk of various illnesses,
including lung cancer and/or asbestosis.
Both McAfee and DeVries’s lawsuits[2]
alleged they contracted cancer from asbestos exposure while in the Navy.[3] For ease of reference, we refer to each of
the McAfee and DeVries plaintiffs collectively as “the plaintiffs.”
The
plaintiffs did not sue the Navy, as they believed it would be immune from a
tort suit.[4] The Court noted the plaintiffs did not sue
the manufacturers of the actual asbestos products, as they went bankrupt.[5] Instead, the plaintiffs sued the manufactures
of the component parts that used the asbestos, and argued since the
manufacturers knew (a) their component parts used asbestos products and (b)
asbestos is dangerous, the manufacturers of the component parts had a duty to
warn of the dangers of asbestos.
Lower
Court Proceedings
The
plaintiffs filed their suits separately in Pennsylvania state courts.[6] Ultimately, the defendants successfully
removed both suits to the Eastern District of Pennsylvania, which determined
that the circumstances of each case satisfied the maritime tort jurisdiction
test, and thus maritime law applied.[7]
The product
manufacturers asserted a “bare metal” defense, which the Third Circuit
described as “a manufacturer who delivers a product ‘bare metal’ – that is,
without the insulation or other material that must be added for the product’s proper
operation – is not generally liable for injuries caused by asbestos in
later-added materials.”[8]
The District Court applied a “bright line” interpretation of the bare metal
defense, and thereby granted the summary judgment motions. The plaintiffs appealed to the Third Circuit,
who reversed, holding that maritime law (a) protects “sailors” and (b) a
manufacturer of a bare metal product is still liable for a failure to warn when
the use of a dangerous lubricating product is reasonably foreseeable.[9]
The
Supreme Court Majority Opinion
In a 6-3
decision, the Supreme Court disagreed with both the District Court and Third
Circuit, and crafted a new “bare-metal defense” for maritime torts. Justice Kavanaugh wrote the majority opinion,
in which Chief Justice Roberts and Justices Kagan, Breyer, Sotomayor, and
Ginsburg joined. Justice Gorsuch filed a
dissent, joined by Justices Thomas and Alito.
In reaching
their decision, Justice Kavanaugh began his analysis by noting that the Supreme
Court acts “as a common law court, subject to any controlling statues enacted
by Congress.”[10] Later in the opinion, Justice Kavanaugh
recited the generally accepted duty to warn from the Restatement (Second) of
Torts, §388, which requires a product manufacturer to warn potential users as
part of its general duty of care “when the manufacturer ‘knows or has reason to
know’ that is product ‘is or is likely to be dangerous for the use for which it
is supplied’ and the manufacturer ‘has no reason to believe’ that the product’s
users will realize that danger.”[11]
Recognizing
the special status afforded seafarers (the opinion uses “sailors” instead of
“seamen”) under Admiralty law, the Court rejected both the bright line test
used by the District Court (and the Sixth Circuit in Lindstrom v. A-C Prod. Liability Trust[12])
as well as the foreseeability test used by the Third Circuit.[13] Instead, the Court held as follows:
In the maritime
tort context, we hold that a product manufacturer has a duty to warn when (i)
its product requires incorporation of a part, (ii) the manufacturer knows or
has reason to know that the integrated product is likely to be dangerous for
its intended uses, and (iii) the manufacturer has no reason to believe that the
product’s users will realize that danger.[14]
Thus, the
Court disagreed with the reasoning of the Third Circuit but affirmed the Third
Circuit’s judgment, which required the District Court to apply a different
standard than the bright line test to the “bare metal” defense.
The
Supreme Court – Dissenting Opinion.
Justice
Gorsuch, writing for Justices Thomas and Alito, began his analysis by noting
that the majority correctly rejected the foreseeability test.[15] However, Justice Gorsuch found the new test
as equally problematic as the foreseeability standard, giving three main examples or hypotheticals of the
difficulty of application:
-1- Can
a person’s side-by-side use of two products constitute “incorporation” of the
products?
-2- What
is an “integrated product?”
-3- If
a defendant believed the manufacturer of the integrated or incorporated product
believed that product’s manufacturer would warn others, is that sufficient to
comply with this new duty?[16]
The dissent concluded this analysis as
follows:
Headscratchers like
these are sure to enrich lawyers and entertain law students, but they also
promise to leave everyone else wondering about their legal duties, rights, and
liabilities.
Moreover, the dissent analyzed an
issue the majority opinion did not examine: the issue of fair notice.[17] Specifically, Justice Gorsuch notes that
these claims arise from products made “decades ago” where the manufacturers
complied with the law, “provided all the warnings the law required.” The dissent viewed the new rule as creating a
situation of retroactive responsibility “for failing to warn about other
people’s products.”
Analysis
& Take-Aways
There are
several immediate take-aways from this decision.
First, we
have a new rule in Admiralty and Maritime cases for products liability and the
manufacturer’s duty to warn when the manufacturer produces a “bare metal”
product. That test purports to be a
middle ground between the rejected foreseeability and bright line tests
previously used by the lower courts.
Notably, this rule is limited to the Admiralty and Maritime context by
the language of Justice Kavanaugh’s opinion.
Second, the scope
of this new rule within the Admiralty and Maritime context is arguably unclear. A question remains as to whether the “bare
metal” defense articulated in the majority applies to non-seamen, i.e.
longshore workers. Could it apply to
passengers as well?
On the one
hand, the opinion couches the creation of this middle ground rule as
appropriate in maritime law due to the special protections afforded seafarers.[18] Longshore workers and passengers are not
seamen. They do not receive special
protections under Admiralty law in the same way as do people who faces the
perils of the sea.
On the other
hand, the Court’s statement of the rule in its holding (as seen above) does not
limit the language to seamen or sailors.
The dissent also states the rule is limited to the “maritime context”
without further clarification.[19]
We predict
this issue will likely be litigated in the near future. Neither the majority nor the dissent
addresses this specific issue, as there likely are numerous longshore workers
in a similar position to the plaintiffs in the instant matter.
Third,
the opinion does not analyze (ostensibly leaving it to the lower courts) about
when manufacturers of “bare metal” products (either in this case or generally)
knew or should have known that the use of asbestos in the “bare metal” product
would result in exposure to asbestos fibers.
Is it at the time the product rolls off the assembly line, when it is
installed, or does the obligation continue throughout the life of the
product? This question, raised by the
dissent, will likely spawn further litigation and appeals.
Fourth and
finally, does this call into question past settlements on asbestos claims where
a bare metal product was at issue? The
answer is one hammered into our heads in law school: it depends. If such a manufacturer was previously sued
and settled, with the plaintiff(s) signing a global settlement and general
release of all claims foreseen and unforeseen, known and unknown, it would
likely be difficult to re-litigate those claims. However, it would be prudent,
if the claim sounded in Admiralty, to review those releases and determine if the
language is strong enough to withstand the onset of new litigation predicted by
Justice Gorsuch and the dissenter.
[2]
Sadly, both these veterans died during the course of their litigation.
[4]
2019 U.S. LEXIS 2087 at *8, citing to Feres
v. United States, 340 U.S. 135 (1950).
[5]
Id. at *9.
[6]
See In re Asbestos Prods. Liab. Litig.,
873 F.3d 232, 234 (3rd Cir. 2017), overruled by Air & Liquid Sys. Corp. v. Devries, 2019 U.S. LEXIS 2087
(2019).
[8]
873 F.3d at 234.
[9]
873 F.3d at 234-35.
[10]
Id. at *5-6, citing to Exxon Shipping Co. v. Baker, 554 U.S.
471, 507-08 (2008).
[11]
2019 U.S. LEXIS 2087 at *11, citing to 2 Restatement (Second)
[12]
424 F.3d 488 (6th Cir. 2005).
[13]
2019 U.S. LEXIS 2087 at 11-13 (March 19, 2019).
[14]
2019 U.S. LEXIS 2087 at *18.
[15]
2019 U.S. LEXIS 2087 at *19 (Gorsuch, J., dissenting).
[16]
2019 U.S. LEXIS 2087 at 23-25.
[17]
2019 U.S. LEXIS 2087 at *26-27.
[18]
2019 U.S. LEXIS 2087 at *16.
[19]
2019 U.S. LEXIS 2087 at *27-28.