Component part and raw material suppliers generally are not liable for defects in the finished consumer products sold by downstream manufacturers over which they exert no control. Part and material suppliers, moreover, may satisfy their duty to warn consumers by relying on the manufacturers that purchase these inputs, sophisticated entities with better knowledge of both the finished products and manufacturing processes involved, to inform consumers of accompanying risks. Application of these traditional defences can often lead to complex policy questions, particularly in cases where injury results from the combination of separate products produced by different manufactures or where liability is asserted against a party whose product did not directly lead to any harm. Recent decisions – most notably in California – have reached conflicting conclusions regarding the application of these defences at various stages in the manufacturing process.

The Ramos Decision

In Ramos v. Brenntag Specialties, Inc., 169 Cal. Rptr. 3d 513 (Ct. App. 2014), a California appellate court upheld a foundry worker’s claims that metal fumes and dust particles caused him to develop pulmonary fibrosis, rejecting the metal and stone suppliers’ argument that they were shielded from liability at the motion to dismiss stage. In a unanimous decision, the three-judge panel concluded that the materials suppliers could be held liable to Ramos because they sold defective goods to his employer which, when used as the suppliers’ intended, caused him injury. The court focused on several key allegations: that the suppliers’ produced specialized materials, that Ramos’s employer was “a small unsophisticated company with a relatively small number of employees,” none of whom were aware of the hazards of working with the suppliers’ products, that the suppliers’ products were “inherently dangerous” because they released metallic toxins, silica dust, and other known causes of interstitial pulmonary fibrosis when treated and handled during manufacturing, and that Ramos used the suppliers’ products as they specifically intended in his employer’s manufacturing process.

The Ramos court expressly disagreed with the decision in Maxton v. Western States Metals, 136 Cal. Rptr. 3d 630 (Ct. App. 2012), which applied the component parts doctrine to dismiss claims against metal suppliers in another metalworker’s pulmonary fibrosis claim. In Maxton, the plaintiff alleged that fumes and dust released from the defendants’ raw materials during cutting, grinding, sandblasting, welding, brazing and other industrial processes performed by the plaintiff and co-workers caused his injury. Affirming the dismissal of these claims, theMaxton concluded that “imposing liability on suppliers of product components would force them to scrutinize the buyer-manufacturer’s manufacturing process and end products in order reduce their exposure to lawsuits. . . . Courts generally do not impose this onerous burden on suppliers of product components because the buyer-manufacturers are in a better position to guarantee the safety of the manufacturing process and the end product.” Id. at 635-36.

Recent decisions limiting part and material suppliers’ liability

Although the Ramos decision creates a conflict among the California courts, the component parts doctrine and similar defences remain available to upstream manufacturers and suppliers in that and other states. For example, in Johnson v. Armored Auto Group, No. RG13-669270, 2014 WL 1651124 (Cal. Super. Ct. April 15, 2014), the plaintiff sued multiple manufacturers, designers and suppliers alleging that he developed acute myeloid leukaemia as a result of exposure to benzene contained in their products and materials. Affirming summary judgment for the defendant US Steel, the California Superior Court held that as a bulk supplier of the benzene-containing component in one product used by Johnson, US Steel had discharged its duty to warn Johnson through information that was provided to the product’s manufacturer, which the court determined was a sophisticated intermediary that was fully informed of the risks of benzene by US Steel and others.

In a case involving claims of asbestos exposure by US Navy technicians, a New Jersey appellate court recently held that the manufacturer of hydraulic pumps, into which asbestos-containing gaskets manufactured by an unidentified manufacturer were fitted following sale, was under a duty to warn of the asbestos risks posed by this unknown third-party’s replacement parts. Hughes v. A.W. Chesterton Co., — A.3d —, 2014 WL 1613394 (N.J. Super. Ct. App. Div. April 23, 2014). The court, however, upheld dismissal of the claims against the pump manufacturer because the plaintiffs failed to establish a sufficient causal link between their injuries and an injury-producing defect that existed when the pumps that it manufactured left the defendant’s control. In the court’s view, to impose liability on the pump maker for a different manufacturer’s asbestos-containing replacement parts “would rest upon no more than mere guesswork” and would fail to limit liability “only to those defendants to whose products the plaintiff can demonstrate he or she was intensely exposed.” Id. at 8.

Although its decision rested on the lack of the causation, the New Jersey court in Hughesreached the same result as an earlier decision from the California Supreme Court in O’Neil v. Crane Co., 266 P.3d 987 (Cal. 2012), which similarly barred a Navy officer’s claims against pump and valve manufacturers for exposure to asbestos released from insulation, gaskets and packing, all of which were made by third parties and added to the defendants’ pumps and valves post sale. In O’Neil, however, the court’s analysis focused on whether a manufacturer is under any duty to warn of risks posed by another maker’s post-sale replacement parts. The court concluded that the pump and valve manufacturers were under no such duty to the plaintiff O’Neil because his injury was the direct result of risks imposed by a third party, and the defendants bore no direct responsibility for the harm to O’Neil. The court observed that the defendants’ products did not substantially contribute to the harm nor did the defendants participate substantially in creating a harmful combined use of their products with the third-party’s asbestos-containing components.

Conclusion

In California, the state’s supreme court will likely have to take up these issues to resolve the conflict in appellate authorities over the proper scope of the component parts doctrine and similar defences. In the interim, claims in that state, and others, will continue to test these traditional limits on the liability of upstream suppliers.