On February 1, 2012, the California Court of Appeal for the Second Appellate District found that a supplier of raw materials cannot be held liable under theories of negligence and strict product liability for injuries claimed to arise from the use of such raw materials in the manufacture of finished goods. Maxton v. Western States Metals, 203 Cal. App. 4th 81 (2012).
The plaintiff in Maxton alleged that from 1975 through 2007 he worked as a laborer where he used a number of metal products that included steel and aluminum ingots, sheets, rolls and tubes that were manufactured and supplied by defendants. Plaintiff also alleged that during the course of his and his co-workers’ use of these products in cutting, grinding, sandblasting, welding, brazing and other metal processes that he was exposed to and inhaled toxicologically significant amounts of toxic fumes and dusts that caused him to develop interstitial pulmonary fibrosis and other injuries.
Based on these allegations, plaintiff filed suit against the defendant manufacturers of the metal products alleging causes of action for (1) negligence; (2) strict products liability – failure to warn; (3) strict products liability – design defect; (4) fraudulent concealment and (5) breach of implied warranty. The defendants filed demurrers and motions for judgment on the pleadings challenging plaintiff’s Second Amended Complaint on the grounds that his case was barred by the component part supplier doctrine. The trial court sustained the demurrers and granted the motions, and then entered judgment in favor of the defendants. Plaintiff appealed.
In upholding the lower court’s ruling, the Court of Appeal applied the four factors articulated in Artiglio v. General Electric Co., 61 Cal. App. 4th 830 (1998), to the Maxton case: “[C]omponent and raw material suppliers are not liable to ultimate consumers when the goods or material they supply are not inherently dangerous, they sell goods or material in bulk to a sophisticated buyer, the material is substantially changed during the manufacturing process and the supplier has a limited role in developing and designing the end product. When these factors exist, the social cost of imposing a duty to the ultimate consumers far exceeds any additional protection provided to consumers.”
First, the Court of Appeal determined, unlike asbestos, that the metal products in this case were not dangerous when they left defendants’ control. The subject products only became dangerous because of the manufacturing process controlled by plaintiff’s employer.
Second, the Court of Appeal found that plaintiff’s employer was a sophisticated buyer. The facts demonstrated that over a period of more than three decades plaintiff’s employer purchased hundreds of different kinds of metal, abrasive and other industrial products with exact specifications from numerous suppliers. Plaintiff’s employer’s manufacturing process required its employees to operate sanding, grinding, sandblasting, cutting, welding, brazing, soldering and other machines in its facilities. Many of the metal parts Plaintiff’s employer purchased were more than 20 feet long, and some were substantially larger. Plaintiff’s employer was not a start-up company operating out of the owner’s home garage. It was a sophisticated industrial enterprise.
Third, the Court of Appeal determined that the metal products were substantially changed during their manufacturing process of employees engaged in “melting, cutting, grinding, polishing, sanding, sandblasting, machining, and soldering” the products.
Finally, nothing in the operative complaint indicated that defendants played any role whatsoever in developing or designing plaintiff’s employer’s end products, nor did plaintiff claim that they did so.
Based on these facts, the Court of Appeal held that the defendants were not liable under the component parts doctrine. The Court of Appeal specifically stated: “the social cost of imposing a duty on defendants and expanding the strict liability doctrine under the circumstances of this case far exceeds any additional protection provided to users of defendants’ products, including Maxton. By social cost we mean the practical burdens that would be placed on defendants as suppliers of the ubiquitous metal products involved in this case. Defendants would be required to assess the risks of using their metal products to manufacture other products. In order to make such assessments, defendants would need to retain experts on the countless ways their customers, including LeFiell, used their metal products. Defendants would also be placed in the untenable position of second-guessing their customers whenever they received information regarding potential safety problems. We decline to expand the law of negligence and strict liability in that way the social cost of imposing a duty on defendants and expanding the strict liability doctrine under the circumstances of this case far exceeds any additional protection provided to users of defendants’ products, including Maxton and that defendants would also be placed in the untenable position of second-guessing their customers whenever they received information regarding potential safety problems.”