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New York Court of Appeals Rules on Manufacturer’s Duty to Warn for a Third Party Product in an Asbestos Case

 

New York’s highest court issued a seminal decision on June 28, 2016, upholding verdicts against Crane Co. in two mesothelioma cases where Crane Co. was found liable for the use of asbestos-containing products manufactured by third parties on its valves. See link to decision here.

 

Mr. Ronald Dummitt was exposed to asbestos as a Navy boiler technician, including when he worked on Crane Co. valves, changing asbestos-containing gaskets and packing designed and manufactured by companies other than Crane Co. Similarly, Mr. Gerald Suttner was exposed to asbestos while working as a pipe fitter at General Motor’s Tonawanda Engine Plant, where he changed asbestos-containing gaskets and packing on Crane Co. valves that included gaskets and packing made by third parties.

 

Inserting the concept of “economic necessity” into the analysis of the duty to warn, the Court of Appeals found that the manufacturer of a product has a duty to warn of the danger arising from the known and reasonably foreseeable use of its product in combination with a third-party product which, “as a matter of design, mechanics or economic necessity, is necessary to enable the manufacturer’s product to function as intended”.

 

The Court noted that a manufacturer’s superior ability to garner information about dangerous uses of its products, extends to combined uses with other manufacturer’s products, and that the manufacturer of a durable item (such as Crane Co.’s valves) used in conjunction with a fungible product (such as asbestos gaskets and packing) was typically in the best position to warn the users of the two products together of the dangers of that use.

 

In analyzing its prior decision in Rastelli v. Goodyear Tire and Rubber Co., 79 N.Y.2d 289, the Court found that its decision here was consistent, in that implicit in the Rastelli decision was the recognition that a manufacturer’s duty to warn of combined use of its product with another product depended “in part on whether the manufacturer’s product can function without the other product”, and that it would be unfair to allow a manufacturer to avoid the minimal cost of including a warning about the dangers of joint use where the manufacturer knew that the combined use was “necessary and dangerous”.  The Court noted that the justification for a duty to warn “becomes particularly strong” where the manufacturer (such as with Crane Co. in these cases) intended that the customer engage in the “hazardous combined use of the products at issue”.

 

The crux of this decision lies in the Court’s conclusion that “where evidence supports an inference that the third-party product is the only product that both enables the intended function of the manufacturer’s product and is available at a cost that is reasonably sustainable for the average individual or entity that purchases the manufacturer’s product for the use at issue, the manufacturer has a duty to warn of the perils of the economically necessary and foreseeable combined use of its product with the third-party product”.

 

Crane Co. issued a comment on its website expressing disappointment at the decision and stated its opinion that the Court of Appeals has adopted a new test that considers “economic necessity” in determining a manufacturer’s duty to warn about potential hazards of third party products used in combination with its own product, and that this new test will now have to be interpreted and applied by the lowers courts.

 

This decision is a victory for the victims of asbestos-related diseases in New York State and marks a blow to the “bare metal defense”, which had been gaining some ground in courts nationally. The Court considered factors such as Crane Co.’s specification of the use of asbestos-based sealing components in its technical drawings for its valves, the fact that it packaged its valves with asbestos-containing products, the fact that it marketed asbestos-containing “Cranite” that could be used as a replacement for the original gasket and packing material, and that it assisted in the revision of the “Naval Machinery” manual which specified that Navy employees install asbestos-based gaskets on valves on Navy ships in reaching its decision. In future cases, facts supporting the manufacturer’s recommendations and expectations that asbestos-containing third party products be used on their products, in addition to the availability of alternatives to asbestos-containing components and the cost of those alternatives will be of paramount importance in establishing a duty to warn.