Air and Liquid Systems Corp. v. Devries (Decision March 19, 2019)
Supreme Court declares a rule on products liability under maritime law
The widows of two navy shipmen received a favorable ruling in the Supreme Court. Their husbands worked on navy ships during years when asbestos insulation was used on the ships. The sailors later developed cancer that the widows argue was caused by exposure to asbestos in the ship parts.
The widows sued two companies which had shipped navy engine parts and potentially caused their husbands’ illnesses. But these companies were involved only before the asbestos was added. Can they be responsible for failing to warn of the dangerous product that would be added later?
The Supreme Court ruled: yes, in certain circumstances. Under maritime law, product manufacturers that know (or have reason know) that a product is likely to be dangerous when integrated and used as intended have a duty to warn if they can’t assume the users will realize the danger.
Liability in the “chain of manufacture”
In modern products liability law, any party in the “chain of manufacture” can be liable for harm caused by those products. But Air and Liquid Systems Corp. and Ingersoll Rand — two of the defendants the widows sued -- claimed they can’t be responsible because their products didn’t contain asbestos. It was only later that asbestos insulation would be added. As the lower court explained:
A classic scenario would be if an engine manufacturer ships an engine without a gasket, the buyer adds a gasket containing asbestos, and the asbestos causes injury to a worker. May the manufacturer be held liable?
While, Air and Liquid Systems and Ingersoll Rand might have been involved in the chain of production that resulted in a harmful product, the companies claimed they didn’t actually have anything to do with the harmful part. Does that count for “chain of manufacture” liability?
Supreme Court ruling
The Supreme Court considered three routes in deciding the question.
First option: Perhaps the “bare-metal” shippers would not be liable at all.
Second option: The shipper could be liable if it was “foreseeable” that the asbestos would be added later (even if the product didn’t necessarily require the dangerous product for its intended use).
Third option: A middle ground. In order for a “bare-metal” shipper to be liable, the shipper would have to know or have reason to know that the dangerous product would be added for the part to be used as intended; and furthermore, the shipper has no reason to know that the users would realize the danger.
The Court went with the third option, the middle ground. The six-member majority explained, the duty to warn will be triggered (the middle ground satisfied) in all of the following circumstances:
(i) a manufacturer directs that the part be incorporated; (ii) a manufacturer itself makes the product with a part that the manufacturer knows will require replacement with a similar part; or (iii) a product would be useless without the part.
Maritime law factor
In making its decision, the Supreme Court acknowledged (just as the lower court before it did) that maritime law is especially supportive of sailors. Maritime rules are meant to help out sailors more than regular “common law” would help plaintiffs. This factor suggested that the bare-metal defense would be too bare to provide the protections to sailors that maritime law intends.
The dissent, written by Gorsuch and joined by Thomas and Alito, would have gone with the “bare-metal” defense and not imposed liability on the shippers.