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Air and Liquid Systems Corp. v. DeVries

United States Supreme Court

March 19, 2019

AIR AND LIQUID SYSTEMS CORP., et al., PETITIONERS
v.
ROBERTA G. DeVRIES, Individually and as Administratrix of the ESTATE OF JOHN B. DeVRIES, DECEASED, et al.

          Argued October 10, 2018

          ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

         Petitioners produced equipment for three Navy ships. The equipment required asbestos insulation or asbestos parts to function as intended, but the manufacturers did not always incorporate the asbestos into their products. Instead, the manufacturers delivered much of the equipment to the Navy without asbestos, and the Navy later added the asbestos to the equipment. Two Navy veterans, Kenneth McAfee and John DeVries, were exposed to asbestos on the ships and developed cancer. They and their wives sued the manufacturers, alleging that the asbestos exposure caused the cancer and contending that the manufacturers were negligent in failing to warn about the dangers of asbestos in the integrated products. Raising the "bare-metal defense," the manufacturers argued that they should not be liable for harms caused by later-added third-party parts. The District Court granted summary judgment to the manufacturers, but the Third Circuit, adopting a foreseeability approach, vacated and remanded.

         Held: In the maritime tort context, a product manufacturer has a duty to warn when its product requires incorporation of a part, the manufacturer knows or has reason to know that the integrated product is likely to be dangerous for its intended uses, and the manufacturer has no reason to believe that the product's users will realize that danger. Pp. 4-11.

(a) Tort law imposes a duty to exercise reasonable care on those whose conduct presents a risk of harm to others. That includes a duty to warn when the manufacturer "knows or has reason to know" that its product "is or is likely to be dangerous for the use for which it is supplied" and "has no reason to believe" that the product's users will realize that danger. 2 Restatement (Second) of Torts §388. Three approaches have emerged on how to apply that "duty to warn" principle when a manufacturer's product requires later incorporation of a dangerous part in order for the integrated product to function as intended. The first-the foreseeability rule-provides that a manufacturer may be liable when it was foreseeable that its product would be used with another product or part, even if the manufacturer's product did not require use or incorporation of that other product or part. The second-the bare-metal defense-provides that if a manufacturer did not itself make, sell, or distribute the part or incorporate the part into the product, the manufacturer is not liable for harm caused by the integrated product-even if the product required incorporation of the part and the manufacturer knew that the integrated product was likely to be dangerous for its intended uses. A third approach, falling between those two, imposes on the manufacturer a duty to warn when its product requires incorporation of a part and the manufacturer knows or has reason to know that the integrated product is likely to be dangerous for its intended uses.
The third approach is most appropriate for this maritime context. The foreseeability rule would sweep too broadly, imposing a difficult and costly burden on manufacturers, while simultaneously overwarn-ing users. The bare-metal defense ultimately goes too far in the other direction. After all, a manufacturer that supplies a product that is dangerous in and of itself and a manufacturer that supplies a product that requires incorporation of a part that the manufacturer knows or has reason to know is likely to make the integrated product dangerous for its intended uses both "kno[w] or ha[ve] reason to know" that the product "is or is likely to be dangerous for the use for which it is supplied." And in the latter case, the product manufacturer will often be in a better position than the parts manufacturer to warn of the danger, because the product manufacturer knows the nature of the ultimate integrated product. Requiring a warning in these circumstances will not impose a significant burden on manufacturers, who already have a duty to warn of the dangers of their own products. Nor will it result in substantial uncertainty about when product manufacturers must provide warnings, because the rule requires a manufacturer to warn only when its product requires a part in order for the integrated product to function as intended. And this Court is unaware of any substantial overwarning problems in those jurisdictions that have adopted the approach taken here. Requiring the product manufacturer to warn when its product requires incorporation of a part that makes the integrated product dangerous for its intended uses is especially appropriate in the context of maritime law, which has always recognized a" 'special solicitude for the welfare'" of sailors. American Export Lines, Inc. v. Alvez, 446 U.S. 274, 285. Pp. 4-10.
(b) The maritime tort rule adopted here encompasses all of the following circumstances, so long as the manufacturer knows or has reason to know that the integrated product is likely to be dangerous for its intended uses, and the manufacturer has no reason to believe that the product's users will realize that danger: (i) a manufacturer directs that the part be incorporated; (ii) a manufacturer itself makes the product with a part that the manufacturer knows will require replacement with a similar part; or (iii) a product would be useless without the part. P. 10.

873 F.3d 232, affirmed.

          KAVANAUGH, J., delivered the opinion of the Court, in which ROBERTS, C. J., and GlNSBURG, BREYER, SOTOMAYOR, and KAGAN, JJ., joined. GOR-SUCH, J., filed a dissenting opinion, in which THOMAS and ALITO, JJ., joined.

          JUSTICE KAVANAUGH delivered the opinion of the Court.

          KAVANAUGH JUSTICE

         In maritime tort cases, we act as a common-law court, subject to any controlling statutes enacted by Congress. See Exxon Shipping Co. v. Baker, 554 U.S. 471, 507-508 (2008). This maritime tort case raises a question about the scope of a manufacturer's duty to warn. The manufacturers here produced equipment such as pumps, blowers, and turbines for three Navy ships. The equipment required asbestos insulation or asbestos parts in order to function as intended. When used on the ships, the equipment released asbestos fibers into the air. Two Navy veterans who were exposed to asbestos on the ships developed cancer and later died. The veterans' families sued the equipment manufacturers, claiming that the manufacturers were negligent in failing to warn of the dangers of asbestos.

         The plaintiffs contend that a manufacturer has a duty to warn when the manufacturer's product requires incorporation of a part (here, asbestos) that the manufacturer knows is likely to make the integrated product dangerous for its intended uses. The manufacturers respond that they had no duty to warn because they did not themselves incorporate the asbestos into their equipment; rather, the Navy added the asbestos to the equipment after the equipment was already on board the ships.

         We agree with the plaintiffs. In the maritime tort context, 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. The District Court did not apply that test when granting summary judgment to the defendant manufacturers. Although we do not agree with all of the reasoning of the U.S. Court of Appeals for the Third Circuit, we affirm its judgment requiring the District Court to reconsider its prior grants of summary judgment to the defendant manufacturers.

         I

         Kenneth McAfee served in the U.S. Navy for more than 20 years. As relevant here, McAfee worked on the U.S. S. Wanamassa from 1977 to 1980 and then on the U.S. S. Commodore from 1982 to 1986. John DeVries served in the U.S. Navy from 1957 to 1960. He worked on the U.S. S. Turner.

         Those ships were outfitted with equipment such as pumps, blowers, and turbines. That equipment required asbestos insulation or asbestos parts in order to function as intended. When used as intended, that equipment can cause the release of asbestos fibers into the air. If inhaled or ingested, those fibers may cause various illnesses.

         Five businesses-Air and Liquid Systems, CBS, Foster Wheeler, Ingersoll Rand, and General Electric-produced some of the equipment that was used on the ships. Although the equipment required asbestos insulation or asbestos parts in order to function as intended, those businesses did not always incorporate the asbestos into their products. Instead, the businesses delivered much of the equipment to the Navy without asbestos. The equipment was delivered in a condition known as "bare-metal." In those situations, the Navy later added the asbestos to the equipment.[1]

         McAfee and DeVries allege that their exposure to the asbestos caused them to develop cancer. They and their wives sued the equipment manufacturers in Pennsylvania state court. (McAfee and DeVries later died during the course of the ongoing litigation.) The plaintiffs did not sue the Navy because they apparently believed the Navy was immune. See Feres v. United States, 340 U.S. 135 (1950). The plaintiffs also could not recover much from the manufacturers of the asbestos insulation and asbestos parts because those manufacturers had gone bankrupt. As to the manufacturers of the equipment-such as the pumps, blowers, and turbines-the plaintiffs claimed that those manufacturers negligently failed to warn them of the dangers of asbestos in the integrated products. If the manufacturers had provided warnings, the workers on the ships presumably could have worn respiratory masks and thereby avoided the danger.

         Invoking federal maritime jurisdiction, the manufacturers removed the cases to federal court. The manufacturers then moved for summary judgment on the ground that manufacturers should not be liable for harms caused by later-added third-party parts. That defense is known as the "bare-metal defense."

         The District Court granted the manufacturers' motions for summary judgment. The U.S. Court of Appeals for the Third Circuit vacated and remanded. In re Asbestos Prods. Liability Litigation,873 F.3d 232, 241 (2017). The Third Circuit held that "a manufacturer of a bare-metal product may be held liable for a plaintiff's injuries suffered from later-added asbestos-containing materials" if the manufacturer could ...


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