The Curious Case of Tort Liability for a Defective Product That the Defendant Did Not Make, Sell, or Distribute.

• Author: Scordato, Marin Roger

TABLE OF CONTENTS ABSTRACT 135 TABLE OF CONTENTS 137 I. INTRODUCTION 138 II. BARE-METAL JURISPRUDENCE 139 A. The DeVries Case on its Way to the U.S. Supreme Court 139 B. The U.S. Supreme Court Decision in DeVries 144 C. The Early Legacy of the U.S. Supreme Court's Decision in DeVries 145 III. COMMENTARY ON ANY FUTURE BARE-METAL JURISPRUDENCE 150 A. What Difference Should It Make That DeVries Is a Maritime Law Decision? 150 B. A Consistent Failure to Consider the Bare-Metal Equipment Issue Within Its Appropriate Doctrinal Context 154 1. Bare-Metal Equipment Manufacturers as Defendants in Negligence Claims 157 2. The Bare-Metal Defense is Not a Conceptually Coherent Response to the Bare-Metal Equipment Issue in the Context of Negligence 161 3. Bare-Metal Equipment Manufacturers as Defendants in Strict Products Liability Claims 164 4. The Bare-Metal Defense is at Least a Conceptually Coherent Response to the Bare-Metal Equipment Issue in the Context of Strict Products Liability Claims 174 IV. CONCLUSION 176 I. INTRODUCTION

Imagine the following circumstance: a defendant is a manufacturer of a product that requires the addition of other components. The defendant does not manufacture or sell these additional components. The user of the product must obtain these parts from other manufacturers and sellers. Some of these additional required parts turn out to be defective, and dangerously so. When incorporated into the basic product, and in combination with it, these additional parts cause serious physical injury to certain persons.

The legal rules regarding the liability of the parties in the commercial chain of distribution for the defective add-on parts is reasonably clear, and a well-established part of products liability law. (1) But what rules regulate the tort liability of the manufacturer and seller of the basic, sometimes called "bare-metal" product?

A variety of approaches have been formally adopted by different courts, each of which enjoy strengths and weaknesses, leaving an unresolved, controversial space within modern products liability law. (2)

This question of products liability law is one that has been directly addressed by the United States Supreme Court--a rare occurrence in the products liability area (3)--and the Court has offered its own preferred and unique resolution. (4) This is an unusual instance of the highest federal court in this country taking up an issue of substantive tort law that has no constitutional dimensions. (5)

2. BARE-METAL JURISPRUDENCE

   1. The DeVries Case on its Way to the U.S. Supreme Court

      The U.S. Supreme Court case in question is Air and Liquid Systems Corp. v. DeVries, decided by the Court in 2019. (6) The case came to the Supreme Court because the plaintiffs were servicemen in the United States Navy who were exposed to asbestos while assigned to Navy ships. (7) The federal court system in the United States is granted exclusive jurisdiction over maritime cases by Article III of the United States Constitution. (8)

      The defendants in the case manufactured and sold certain equipment used in the engines of Navy ships. (9) This equipment required additional parts to operate properly. (10) These parts, which included asbestos, were acquired by the Navy from third-party sellers and integrated into the equipment acquired from the defendants. (11) The equipment, once retrofitted with the additional components and in operation, released asbestos fibers into the air, exposing the plaintiffs. (12) The plaintiffs were subsequently diagnosed with cancer. (13) They claimed that their illness was caused by their exposure to the asbestos fibers emitted by the equipment on the ship--equipment that was an integrated combination of the defendants' non-defective products and the defective products of third-party manufacturers and sellers. (14)

      The manufacturers of the defective asbestos parts had gone bankrupt. (15) The plaintiffs believed the Navy was immune from liability under Feres v. United States. (16) The plaintiffs therefore focused on the defendants and sued them in Pennsylvania state court, claiming that the defendants breached their legal duty to warn against the dangers posed by the operation of the integrated equipment. (17) Subsequently, the defendants removed the case to federal district court, invoking federal maritime jurisdiction. (18)

      The case was first heard in the federal court system by the United States District Court for the Eastern District of Pennsylvania, located in the Third Circuit, where it became part of the consolidated asbestos products liability multidistrict litigation (MDL 875). (19) The district court granted the defendants' motion for summary judgment based upon its adoption and application of the so-called "bare-metal defense." (20) "Bare-metal" in this context means that the product requires additional products to be incorporated before it is operational. (21) Frequently in the case of asbestos injuries, these additional products are insulating materials. (22) The bare-metal defense holds that the manufacturer of such equipment--equipment that is not dangerous in its bare-metal state--is generally not liable for the harm caused by the dangerous nature of the after-acquired components and the integrated equipment system. (23)

      On appeal, the Third Circuit remanded the case to the district court, seeking clarification of various issues in the summary judgment entered for defendants and the application of the bare-metal defense to the case. (24)

      In its opinion on remand, the district court expressed concern that the thousands of cases pending in the consolidated asbestos products liability multidistrict litigation (MDL 875) be treated consistently. (25) The bulk of these cases would be adjudicated in the Sixth Circuit. (26) As a result, the Eastern District of Pennsylvania, though located in the Third Circuit, chose to follow Sixth Circuit precedent which recognized the bare-metal defense. (27)

      The primary Sixth Circuit precedent relied upon by the district court was Lindstrom v. A-C Product Liability Trust. (28) The district court described the Lindstrom case as being, at that time, "the only pronunciation of maritime law on the matter from any federal appellate court." (29) The court also concluded that Lindstrom was consistent with the decisions of the only two states that had until then considered the issue. (30)

      Lindstrom was a merchant seaman for more than thirty years who died of malignant mesothelioma. (31) He claimed that he contracted the fatal disease as a result of repeated exposure to multiple pieces of equipment that contained asbestos on numerous ships on which he had worked. (32) He brought claims against bare-metal manufacturers and the manufacturers of component parts added to the bare-metal products post-sale. (33) The action was brought in the Northern District of Ohio in April of 1998. (34) The Sixth Circuit affirmed the district court's summary judgment in favor of some defendants, (35) and judgment in favor of the remaining defendants following a bench trial. (36)

      The Lindstrom district court determined that the plaintiff bore the burden of establishing that he experienced "a substantial exposure to [the asbestos in] a particular defendant's product for a substantial period of time" with respect to the product of any defendant, (37) and that the plaintiff had failed to meet that evidentiary burden regarding some defendants for summary judgment purposes. (38) The court stated clearly its view: "A manufacturer is responsible only for its own products and 'not for products that may be attached or connected' to the manufacturer's product." (39) The court held that a defendant "is not liable for exposure to any...[asbestos containing product]... that was manufactured or provided by another company." (40)

      Relying heavily on the earlier decision in the Lindstrom case, the district court in DeVries resoundingly affirmed the validity and applicability of the bare-metal defense. (41) It made clear that in doing so, it fully considered the negligent failure to warn claims in the case and determined that the bare-metal defense applies equally to bar both negligence and strict products liability claims. (42)

      The Third Circuit reviewed the district court decision de novo. (43) The Third Circuit reversed the district court and held that, under maritime law, "[A] manufacturer of even a bare-metal product [may] be held liable for asbestos-related injuries when circumstances indicate the injury was a reasonably foreseeable result of the manufacturer's actions--at least in the context of a negligence claim." (44) Based on this holding, the Third Circuit vacated the district court's entry of summary judgment for the defendants on the negligence claims and remanded the case for further proceedings. (45)

      When the Third Circuit published DeVries, it created a circuit conflict in maritime law regarding the legal rule that determines the potential liability of a party who supplies only bare-metal equipment. The Sixth Circuit held that such a defendant is not liable for harm caused by defective parts subsequently added to the bare-metal product. (46) On the other hand, the Third Circuit held that such a defendant may be held liable if the subsequent addition of defective parts was foreseeable. (47) In February 2017, one federal district court recognized the circuit split on the issue, noting:

      Courts in six separate jurisdictions... have held, or at least suggested, that an equipment manufacturer may be held liable on a failure to warn theory for harm caused by asbestos-containing replacement components.... Similarly, if one includes the MDL court, then courts in six jurisdictions... have adopted, or at least suggested, the opposite conclusion. (48) Moreover, the difference that existed among the various federal courts on this issue at that time is not adequately captured by a description of a clean split between two distinct approaches: either no...