Air and Liquid System Corp. v. Devries

Issues 

Does a bare-metal manufacturer have a duty to warn users of asbestos-related hazards where a third party added asbestos-containing components to the manufacturer’s product?

Oral argument: 
October 10, 2018

In this case, the Supreme Court will decide whether a manufacturer may be held liable under maritime law for injuries caused by third-party products that were added to the manufacturer’s product. Air and Liquid Systems Corp. argues that a manufacturer has no duty to warn against the asbestos-related dangers of third-party products. Roberta G. Devries and Shirley McAfee, whose husbands died of asbestos-related illnesses, counter that imposing a duty to warn is reasonable because bare-metal manufacturers should reasonably foresee that their products will be used with asbestos-containing products. Because the injured parties were U.S. Navy sailors, this case also asks the Supreme Court to consider principles of maritime law. The outcome will determine the contours of recovery in the admiralty context.

Questions as Framed for the Court by the Parties 

Whether products-liability defendants can be held liable under maritime law for injuries caused by products that they did not make, sell, or distribute.

Facts 

Respondents Roberta G. Devries and Shirley McAfee (“Devries and McAfee”) separately filed suit in Pennsylvania state court, alleging that their deceased husbands, John B. Devries and Kenneth McAfee, had contracted cancer after being exposed to asbestos in the United States Navy. In re: Asbestos Product Liability Litigation (No. VI) at 5. Devries and McAfee claimed that the defendants should be held liable under both negligence and strict liability theories. Id. at 6. Devries claimed that her husband was exposed to asbestos while serving on the U.S.S. Turner from 1957-1960, when materials containing asbestos were added to the ship’s engines. Id. at 5. McAfee similarly alleged that her husband was exposed to asbestos while serving in the Philadelphia Naval Shipyard. Id. Petitioners Air and Liquid Systems Corp. et al. (“Manufacturers”) are a subset of the defendants that Devries and McAfee each originally sued. Id. at 5–6. The Manufacturers made the products at issue “bare-metal,” meaning that the products were produced, sold, and distributed without the insulation materials that often contain asbestos. Id. at 6. 

The Manufacturers removed to the Eastern District of Pennsylvania and moved for summary judgment in the two cases. Id. at 6. In support of these motions, the Manufacturers invoked the bare-metal defense, arguing that because they made and shipped their respective products without asbestos-containing materials, they could not be held liable for injuries or illness caused by any asbestos-containing materials that were later added to their products. Id. at 6.  

The district court granted summary judgment for the Manufacturers. Id. at 6. Devries and McAfee appealed separately to the Court of Appeals for the Third Circuit, each questioning whether the district court had addressed their negligence claims. Id. On remand, the district court explained that summary judgment had been granted in favor of the Manufacturers on both the strict liability and negligence claims. Id. at 6–7. The district court, reasoning that uniformity is a touchstone of maritime law, adopted a bright-line rule approach to the bare-metal defense. Id. Under this bright-line rule, manufacturers of bare-metal products cannot be held liable for injuries caused by later-added asbestos-containing materials. Id. at 7.

Devries and McAfee again appealed to the Third Circuit. Id. at 7. The Third Circuit consolidated the cases and affirmed the lower court’s summary judgment in favor of the Manufacturers with respect to Devries’ and McAfee’s strict liability claims. Id. at 19. With respect to their negligence claims, however, the Third Circuit remanded the claims for the district court to apply a standard-based approach to the bare-metal defense. Id. at 19.  

Under the standard-based approach, manufacturers may be liable for injuries resulting from asbestos added to their products, provided those injuries are a reasonably foreseeable consequence of the manufacturer’s failure to provide users with a sufficient warning. Id. at 17. Although this inquiry is fact-specific, the Third Circuit noted that a bare-metal manufacturer may be held liable for injuries when the manufacturer reasonably could have foreseen that “(1) asbestos is hazardous, and (2) its product will be used with an asbestos-containing part.” Id.  The Third Circuit eventually concluded that because a standard-based approach makes it easier for members of the Navy to recover damages for their injuries, such an approach best serves admiralty law’s central goal of protecting sailors. Id. at 15. 

The United States Supreme Court granted certiorari on May 14, 2018.

Analysis 

FOR WHOSE CONDUCT IS A MANUFACTURER LIABLE?

The Manufacturers argue that a supplier cannot be held liable for injuries caused by third-party products, including replacement parts, that were used with the supplier’s own products.  Brief for Petitioners, Air and Liquid Systems Corp. et al. at 18. In advocating for this “bare-metal rule,” the Manufacturers claim that imposing liability here would undermine a core principle of tort law—namely, that a defendant cannot be liable for failing to warn the public about the negligent conduct of third parties. Id. at 21. The Manufacturers thus reason that they have no duty to warn of asbestos-related dangers of third-party products because the Manufacturers are outside of those products’ “chain of distribution.” Id. at 20–21. In other words, the Manufacturers stress, they did not make, sell, or distribute the injury-causing components. Id. at 18. Although the Manufacturers acknowledge that supplying the product forms “one link in the causal chain leading to injury,” the Manufacturers argue that such a connection is too remote to be considered a proximate cause. Id. at 21–23.  

This absence of duty and proximate cause, the Manufacturers maintain, prevents a defendant from being held liable even where it is reasonably foreseeable that the defendant’s products will be used in conjunction with another product that causes injury. Id. at 23–24, 30.  The Manufacturers thus state that a duty of care cannot arise out of “foreseeability alone.” Id. at 41. While acknowledging that some courts have nevertheless used foreseeability-based tests to impose liability, the Manufacturers contend that courts often define “foreseeability” vaguely enough to create pervasive uncertainty in this area of the law. Id. at 43–45.   

In response, Devries argues that the Manufactures define “product” too narrowly. Brief for Respondents, Roberta G. Devries, et al. at 29. According to Devries, a machine product is the “integrated package” of the machine, rather than its individual component parts. Id. Devries claims that because the Manufacturers sold asbestos-containing components with their original equipment, the Manufacturers’ products include those asbestos-containing components. Id. at 29, 34. Furthermore, Devries states, the later introduction of an asbestos-containing replacement component does not change the “identity” of the product. Id. at 29. This view makes sense, Devries contends, because the Manufacturers’ products required these asbestos-containing components in order to function. Id. at 50. Furthermore, Devries argues, disassembling an integrated product into its component parts would frustrate the law’s preference for simplicity. Id. at 29. Devries therefore claims that the Manufacturers should be subject to a duty of reasonable care. Id. at 28. 

Devries also questions the Manufacturers’ claim that their products lack a causal connection to the asbestos injuries. Id. at 35. Devries contends that installing a replacement asbestos-containing part does not amount to an intervening cause that would absolve the Manufacturers of liability. Id. Instead, according to Devries, it is an event which the Manufacturers should have reasonably foreseen, especially given that their maintenance manuals called for the regular replacement of asbestos-containing components. Id. Thus, Devries argues, the Manufacturer’s products were defective from the start, and the act of replacing the asbestos-containing component parts did not alter the “dangerous condition” of the original product. Id. at 36.

WHO HAS A DUTY TO WARN?

The Manufacturers contend that holding a manufacturer liable for a non-defective product would be inefficient. Brief for Petitioners at 26. The Manufacturers argue instead that third parties are better-positioned to provide warnings about asbestos-related dangers, because the third parties can better ensure that a product’s end users receive the warning. Id. at 46–47. Furthermore, the Manufacturers claim, third parties can more easily test their products for defects and repair those defects once discovered. Id. at 26–27. Imposing liability on a defendant who has no control over the defective product, the Manufacturers conclude, would increase consumer costs without actually improving product safety. Id. at 28. Additionally, the Manufactures caution that imposing a duty to warn here would result in “overwarning,” meaning that warnings would become so lengthy that users would decide not to read them. Id. Finally, the Manufacturers point out that the Navy required the Manufacturers to use asbestos-containing components. Id. at 31.

Devries questions the assertion that the Manufacturers had no control over the third-party products. Brief for Respondents at 54. Accordingly, Devries argues, the Manufacturers were in a better position than the replacement-part suppliers to warn of asbestos-related dangers. Id. at 55. Devries also suggests that holding manufacturers liable in this context would improve product safety. Id. Absent exposure to liability, Devries contends, manufacturers whose machines require asbestos-containing replacement parts have no incentive to develop alternative, asbestos-free components. See id. at 55–56. Devries argues that exposing such manufacturers to liability is also appropriate because the manufacturers rely on the availability of asbestos-containing replacement parts in order to sell their equipment, and therefore indirectly profit off of those parts. Id. at 55. Devries therefore concludes that the Manufacturers were negligent in failing to warn of the foreseeable dangers of asbestos. Id. at 50.

WHICH APPROACH ALIGNS WITH PRINCIPLES OF MARITIME LAW?

The Manufacturers argue that adoption of the bare-metal rule is consistent with principles of maritime law. Brief for Petitioners at 34. Maritime law, the Manufacturers contend, affords manufacturers greater protection than traditional tort law does. Id. at 35. By way of example, the Manufacturers focus on the “economic loss rule,” which holds that commercial manufacturers have no duty “to prevent a product from injuring itself.” Id. The economic loss rule—like the bare-metal rule—thus limits the scope of manufacturer liability. Id. The Manufacturers also claim that the bare-metal rule’s predictability comports with maritime law principles of simplicity and uniformity. See id. at 34, 36. These principles would be frustrated if liability depended on whether the injury was foreseeable, the Manufacturers argue, because “foreseeability” cannot be clearly defined. Id. at 49–50. Furthermore, the Manufacturers claim, because “most things” on ships are connected with each other, every asbestos-related injury is arguably foreseeable to anyone whose products end up in ships. Id. at 49. Finally, the Manufacturers stress that the bare-metal rule is not unfair to sailors, since sailors could still sue the companies who produce the asbestos-containing components and bring claims against “asbestos trusts.” Id. at 37. 

Devries disagrees, arguing that the bare-metal rule comports with established principles of maritime law. Brief for Respondents at 32. Such an inflexible rule, Devries contends, conflicts with maritime law’s preference for providing a remedy in borderline cases. See id. Devries also claims that shielding manufacturers from liability is inconsistent with maritime law. Id. at 30. According to Devries, ship owners who defend against asbestos-related product liability claims routinely implead manufacturers. Id. at 30. Adoption of the bare-metal rule would prevent these indemnification claims, which, Devries suggests, are necessary to apportion liability fairly. Id. at 30–31. Devries also maintains that a foreseeability standard would not be overly vague or too difficult to apply. See id. at 37–38. Devries argues that whether a manufacturer should foresee that its product will be used with asbestos components is a straightforward question, which, if answered yes, imposes a duty to warn on the manufacturer. Id. at 38. Indeed, Devries claims, “general maritime law” has adopted a foreseeability standard. Id. at 47. Devries also states that abandoning the foreseeability standard in maritime law would leave sailors with fewer remedies than similarly situated non-maritime workers, and would thus contradict maritime law’s goal of protecting sailors’ welfare. Id. at 34, 45.

Discussion 

EFFECT ON MANUFACTURERS

In support of the Manufacturers, Coalition for Litigation Justice, Inc. (“the Coalition”), along with other manufacturers whose products are used with asbestos-containing components, argue that imposing a duty to warn upon bare-metal manufacturers would create a deluge of additional asbestos suits. Amici Curiae Brief of Coalition for Litigation Justice, Inc., et al., in Support of Petitioners at 16. The Coalition worries that hundreds of companies, including companies that have never manufactured an asbestos-containing product, could potentially be held liable under this standard. Id. at 17. Moreover, the Coalition contends, manufacturers would unfairly incur the costs of liability for injuries caused by other companies’ asbestos products, which could result in bankruptcies. Id. at 17–18. Furthermore, the Coalition maintains that imposing a duty to warn will lead to unpredictable warning systems and unchecked liability, thereby eroding consumer safety and adversely affecting businesses. Id. at 20–22. Similarly, General Electric Co. (“GE”), in support of the Manufacturers, asserts that “[t]he unpredictability of the Third Circuit’s elusive foreseeability standard threatens manufacturers with ‘vast’ and limitless liability.” Brief of Respondent General Electric (“GE”), in Support of Petitioners at 31.

In contrast, Port Ministries International, in support of Devries, argues that applying the bright-line rule that Petitioners advocate for would allow negligent manufacturers to escape liability. Brief of Port Ministries International as Amicus Curiae, in Support of Respondents at 22–23. Port Ministries asserts that this broad, bright-line rule would protect not just bare-metal manufacturers, but negligent manufacturers outside of the asbestos context. Id. at 23. Furthermore, in response to the assertion that manufacturers’ liability will increase, the American Association for Justice (“AAJ”), in support of Devries, notes that bare-metal manufacturers can procure insurance for asbestos-related liability, including retroactive coverage for liability arising out of past manufacturing. Brief of Amicus Curiae American Association for Justice, in Support of Respondents at 25–26.  AAJ points out that due to the latency of asbestos-related injuries, retroactive insurance is still widely available today, when fewer companies use asbestos-containing products. See id. at 28.  AAJ contends that due to the availability of this insurance coverage, even if liability increases under the standard-based approach, bare-metal manufacturers will not suffer an immense financial burden, because insurance companies can cover some of their liability costs. See id. at 24. 

PROTECTION OF SAILORS

The Chamber of Commerce of the United States of America and The National Association of Manufacturers (“Chamber of Commerce”), in support of the Manufacturers, argue that the “special solicitude” that maritime law generally accords to sailors is not especially significant here. Brief of Amici Curiae Chamber of Commerce of the United States of America and the National Association of Manufacturers, in Support of Petitioners at 17–18. The relationship between bare-metal manufacturers and sailors, the Chamber of Commerce continues, is unlike the potentially exploitative master-sailor relationship that maritime law was designed to protect. Id. Additionally, GE, in support of the Manufacturers, argues that the Third Circuit’s foreseeability test creates a greater risk of sailor injury than does the bright-line rule. GE at 36. GE asserts that the predictability of the bright-line rule would result in a greater number of sailors recovering for their injuries, as opposed to the “arbitrary outcomes” which GE associates with a foreseeability standard. Id. Furthermore, GE argues that under a foreseeability standard, the duty to warn would increase the number of warnings on products used by sailors, leading to redundant, contradictory warning labels. Id. at 37. This explosion in warnings, GE contends, would ultimately undermine sailor safety, because it would bombard sailors with confusing information and impede their ability to identify and adhere to proper, useful warnings. Id. at 38–39.

Conversely, Multiple Veteran Organizations (“MVOs”), in support of Devries, argue that maritime law’s core tenet is the idea that “sailors should enjoy special protections,” especially since sailors are often isolated at sea, with no way to leave their ships in the event of an emergency. Amici Curiae Brief on Behalf of Multiple Veterans Organizations, in Support of Respondents at 11–12. To remain true to this principle, the MVOs claim, courts should adopt the standard-based approach to the bare-metal defense. See id. at 10. In contrast to GE’s argument about potentially excessive warnings, the MVOs contend that not sufficiently warning sailors infantilizes them, preventing them from making informed decisions about their personal safety. Id. at 25. Furthermore, the MVOs believe that a bright-line rule limiting liability for bare-metal manufacturers would result in a windfall for manufacturers of products that require asbestos to operate. Id. at 30. The MVOs also suggest that a bright-line rule would prevent veterans from obtaining full redress for their injuries by eliminating their ability to successfully sue these negligent manufacturers, who have historically been named as defendants in asbestos-related cases. Id. at 30–31.  Furthermore, the MVOs contend that the civil system’s punitive damages are uniquely effective in deterring asbestos-related corporate negligence. Id. at 37. Failing to adopt the Third Circuit’s standard-based approach to the bare-metal defense, the MVOs claim, could therefore lead to continued negligence on the part of manufacturers. Id.

Edited by 

Acknowledgments 

Additional Resources 

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