Mack v. Gen. Elec. Co.

896 F.Supp.2d 333

James MACK, Plaintiff,

v.GENERAL ELECTRIC COMPANY, et al., Defendants.

MDL No. 875.

Case No. 10–03165.

Civil Action No. 2:10–78940–ER.

United States District Court, E.D. Pennsylvania.

Oct. 3, 2012.

Alan R. Brayton, David R. Donadio, Emma E. Nelson, Kimberly J.W.J. Chu, Lance Randall Stewart, Richard Martin Grant, Brayton, Purcell LLP, Novato, CA, for Plaintiff.

Marc Brainich, Allison M. Low, Sedgwick LLP, Derek S. Johnson, Walsworth Ranklin Bevins & McCall LLP, George D. Yaron, Brentley P. Yim, Demiam David Steele, Yaron & Associates, Gabriel A. Jackson, James J. O'Brien, Keri A. Donohue, Jackson Jenkins Renstrom LLP, Daniel James Kelly, Tucker Ellis & West LLP, San Francisco, CA, for Defendants.

MEMORANDUM

EDUARDO C. ROBRENO, District Judge.

+-----------------+
¦TABLE OF CONTENTS¦
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¦I. ¦BACKGROUND                                ¦335 ¦
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¦   ¦                                          ¦    ¦
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¦II.¦LEGAL STANDARD                            ¦336 ¦
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¦  ¦A.¦Summary Judgment Standard        ¦336 ¦
+--+--+---------------------------------+----¦
¦  ¦B.¦The Applicable Law (Maritime Law)¦336 ¦
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¦    ¦                                                       ¦      ¦
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¦III.¦DISCUSSION                                             ¦338   ¦
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¦    ¦A. ¦Maritime Law Objectives                      ¦338  ¦
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¦    ¦B. ¦Sophisticated User Defense Under Maritime Law¦339  ¦
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¦    ¦C. ¦A Navy Ship Is Not a “Product”               ¦344  ¦
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¦    ¦D. ¦Application                                  ¦346  ¦
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¦   ¦                                          ¦    ¦
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¦IV.¦CONCLUSION                                ¦346 ¦
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This case presents two issues of first impression under maritime law. First, is a Navy ship a “product” within the meaning of product liability doctrine. Second, does maritime law recognize a sophisticated user and/or sophisticated purchaser defense and, if so, to what causes of action does the defense(s) apply.

The Court has previously rehearsed these issues without reaching a definite conclusion. Some defendants in the MDL have sought recognition of a sophisticated user defense. In doing so, they have relied upon caselaw applying the substantive law of one or more states, asking this Court to apply state law in a case governed by maritime law. See, e.g., Prange v. Alfa Laval, Inc., No. 09–91848, 2011 WL 4912828, at *1 (E.D.Pa. July 22, 2011) (Robreno, J.) (Doc. No. 264) (ruling on motion appearing at Doc. No. 162); Hays v. A.W. Chesterton, Inc., No. 09–93728, 2012 WL 3096621, at *1 (E.D.Pa. May 1, 2012) (Robreno, J.). Other defendants have also attempted to persuade the Court that cases decided under maritime law by other courts have recognized the defense. The Court has previously rejected the argument, noting that there was no clear precedent, together with the absence of any compelling reason for the Court to create new law recognizing such a defense. See, e.g., Hays, 2012 WL 3096621, at *1 (Doc. No. 336) (ruling on motion appearing at Doc. No. 312–1). Now, for the first time, the Court is presented with a clear-cut case where it must decide whether the sophisticated user defense is cognizable under maritime law.

Because the Defendants are builders of Navy ships, it is also appropriate at this time to consider, in tandem, whether a Navy ship is a “product” for purposes of application of strict product liability law. This issue also was previously raised but not saluted by the court. The Court has reviewed the relevant state law, as well as the existing body of federal and maritime law, seeking to discern trends in the law regarding these issues.

For the reasons that follow, the Court now decides that, under maritime law, (1) a manufacturer or supplier of a product has no duty to warn an end user who is “sophisticated” regarding the hazards of the product, (2) the sophistication of an intermediary (or employer)—or the warning of that intermediary (or employer) by a manufacturer or supplier—does not preclude potential liability of the manufacturer or supplier, and (3) a Navy ship is not a “product” for purposes of strict product liability. In light of these determinations, summary judgment in favor of these shipbuilder Defendants is granted with respect to Plaintiff's strict liability claims because, under maritime law, a Navy ship is not a “product” for purposes of strict product liability. Summary judgment in favor of these Defendants is denied with respect to Plaintiff's negligent failure to warn claims because no Defendant has identified evidence that Plaintiff was a sophisticated user of the asbestos insulation for which Plaintiff seeks to hold it liable.

I. BACKGROUND

This case was transferred in August of 2010 from the United States District Court for the Northern District of California to the United States District Court for the Eastern District of Pennsylvania as part of MDL–875. Plaintiff James Mack alleges that he was exposed to asbestos aboard various Navy ships during the 1960s and 1970s, while employed by the Department of Defense as a welder. He was deposed in December of 2011. He has brought both negligence and strict product liability claims against various defendants, alleging, inter alia, that Defendants are liable for failing to warn him of the hazards of asbestos associated with the products for which he alleges they are responsible.

Defendants are shipbuilders: Todd Pacific Shipyards Corporation (“Todd Shipyards”), Northrop Grumman Shipbuilding, Inc. (“Northrop Grumman”), and General Dynamics Corporation (formerly known as USX Corporation) (“General Dynamics”) (collectively, “Defendants”). Each Defendant has moved for summary judgment, contending, inter alia, that it is free from liability in this case by way of the sophisticated user defense. Defendants have asserted, further, that they cannot face liability on a claim brought under a strict product liability theory because a ship (here, a Navy ship) is not a “product” to which strict product liability theory applies.

Many of the parties initially briefed the issues under California law. By Order dated July 18, 2012, the Court allowed the parties to submit further briefing under maritime law, including policy justifications for their respective positions, in order to inform the Court's decision regarding a recognition by maritime law of a sophisticated user defense. (See Doc. No. 61.) Having considered these arguments, the Court now rules on this issue, as well as whether a Navy ship is a “product” for purposes of strict product liability.

II. LEGAL STANDARDA. Summary Judgment Standard

Summary judgment is appropriate if there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). “A motion for summary judgment will not be defeated by ‘the mere existence’ of some disputed facts, but will be denied when there is a genuine issue of material fact.” Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 581 (3d Cir.2009) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). A fact is “material” if proof of its existence or non-existence might affect the outcome of the litigation, and a dispute is “genuine” if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248, 106 S.Ct. 2505.

In undertaking this analysis, the court views the facts in the light most favorable to the non-moving party. “After making all reasonable inferences in the nonmoving party's favor, there is a genuine issue of material fact if a reasonable jury could find for the nonmoving party.” Pignataro v. Port Auth. of N.Y. & N.J., 593 F.3d 265, 268 (3d Cir.2010) (citing Reliance Ins. Co. v. Moessner, 121 F.3d 895, 900 (3d Cir.1997)). While the moving party bears the initial burden of showing the absence of a genuine issue of material fact, meeting this obligation shifts the burden to the non-moving party who must “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 250, 106 S.Ct. 2505.

B. The Applicable Law (Maritime Law)

In their initial briefing, several of the parties asserted that California law applies to at least certain issues in this case, including the sophisticated user defense. However, where a case sounds in admiralty, application of a state's law would be inappropriate. Gibbs ex rel. Gibbs v. Carnival Cruise Lines, 314 F.3d 125, 131–32 (3d Cir.2002).¹ Therefore, if the Court determines that maritime law is applicable, the analysis ends there and the Court is to apply maritime law. See id.

Whether maritime law is applicable is a threshold dispute that is a question of federal law, see U.S. Const. Art. III, § 2; 28 U.S.C. § 1333(1), and is therefore governed by the law of the circuit in which this MDL court sits. See Various Plaintiffs v. Various Defendants (“ Oil Field Cases ”), 673 F.Supp.2d...