Posted in Product Liability
It’s probably common knowledge
to even a novice product liability practitioner that a manufacturer can be held
liable for a defect in a component part supplied by another company that is
integrated into the manufacturer’s end product.
After all, under most
commonly held notions of product liability law, the product manufacturer is
subject to liability for a defect even when the defect arises solely from a
flaw in a component part manufactured or supplied by another company.
By
accepting the component from the supplier and integrating it into the
manufacturer’s product, the manufacturer effectively “buys” any liability for a
defect that may come with the component. Public policy requires the product
manufacturer to make sure that it uses components supplied by reputable
companies that are designed with safety in mind.
The manufacturer is in the
superior position to ferret out defective components and to avoid their
use. Since the manufacturer realizes the benefits (i.e., profits)
from marketing the product, it should also be held to answer for any product
defects, even those from a component part it did not manufacture.
Under what circumstances,
however, may a product manufacturer be liable for a defect in a product that it
did not incorporate as a component into its end product?
New York’s highest court, the Court of Appeals, recently weighed in on this
question in a decision on two appeals emanating from New York City’s ongoing
asbestos litigation. The Court held that a product manufacturer, in some
circumstances, may indeed have a duty to warn about dangers inherent in using
its product in conjunction with a third party’s defective component.
Both cases (Dummitt v. A.
W. Chesterton; Suttner v. A. W. Chesterton) involved
innocuous valves that were manufactured by Crane Company. The valves were sold
by Crane for use in various industrial applications in conjunction with asbestos-laden
gaskets and packing that Crane did not manufacture and supply. Plaintiffs
Ronald Dummitt and Gerald Suttner both contracted mesothelioma after working at
their jobs with the Crane valves throughout most of the 1960s and 1970s.
They sued Crane, among many other companies, and won large verdicts against the
defendants.
Crane appealed the verdicts, arguing that it had no duty to
warn about the use of its valves in conjunction with the other company’s
asbestos-filled gaskets and packing made by third parties. Citing well-known
cases such as Rastelli v. Goodyear Tire & Rubber, 79 NY2d 289
(1992) for the general proposition that a product manufacturer had no duty to
warn about the dangers of third-party products, Crane asserted that it did not
control the production of the asbestos-containing adjuncts to its valves and
certainly had not placed them into the stream of commerce.
In rejecting Crane’s arguments
in both appeals, the Court of Appeals held that a product manufacturer has a
duty to warn of the danger arising from known and reasonably foreseeable uses
of its product in combination with a third-party product, which, as a matter of
design, mechanics or economics, is necessary to enable the manufacturer’s
product to function as intended. The Court noted that a product manufacturer
may have a duty to warn where it is in a “superior position” to know about the
hazards of combining the two products, especially where the manufacturer’s
product is “durable” and the third-party product is a “wear item” that is prone
to periodic replacement. The Court noted that the Crane valves “could not
practically function” without the gaskets and packing, and that the company’s
drawings for the valves specified the use of asbestos-based components.
The Court went on to cite
evidence in the underlying litigation that suggested that Crane knew about the
dangers of asbestos as early as the 1970s, yet issued no warnings with respect
to its own asbestos-containing end-products until many years later. The
Court also drew upon several lower court decisions upholding a duty to warn
under various circumstances, concluding that its decision “adds but a note to a
familiar anthem in failure-to-warn jurisprudence.” In effect, the Court agreed
with the plaintiffs’ position that Crane’s strong interest in its customers’
use of third-party asbestos-based products constituted an “indirect” role by
Crane in the distribution of the gaskets and packing sufficient to overcome the Rastelli precedent.
What should one make of this
latest foray into failure-to-warn law? Based on the Court of Appeals
decision in Dummitt and Suttner, may a
manufacturer of a car battery be liable for defective jumper cables that it did
not manufacture and sell if they induce the battery’s explosion and subsequent
injury to the plaintiff? May a tire manufacturer be liable for injuries
caused by a defect in the wheel into which it is incorporated? By virtue
of Dummitt and Suttner, these questions take on
greater significance given the rather revolutionary notion now more prevalent
in New York that a manufacturer can indeed be held liable for defects in a
product it did not design, manufacture or sell. While a manufacturer’s
exposure may be circumscribed by the rather rare fact patterns described by the
Court of Appeals, the door has nonetheless been opened for a more revolutionary
look at a long-held notion of product liability law.
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