Scope of Potential Liability Expanded in NY for Manufacturers with Third-Party Asbestos Components

A long-awaited decision recently handed down by the New York Court of Appeals expanded the scope of potential liability of manufacturers whose products utilized asbestos components designed and produced by another company.  In a single opinion addressing appeals by the Crane Company in the matters of Dummitt v. A.W. Chesterton Co., et al. and Suttner v. A.W. Chesterton Co., et al., the Court was tasked with deciding when, if ever, a manufacturer must warn against the danger inherent in using the manufacturer’s product together with a product made by another company. Drawing on its reasoning from the precedent-setting case Rastelli v. Goodyear Tire & Rubber Co., 79 NY2d 289 (1992), the Court held that the manufacturer of a product does have a duty to warn of danger arising from the known and reasonably foreseeable use of its product in combination with a third-party product which, as a matter of design, mechanics or economic necessity, is necessary to enable the manufacturer’s product to function as intended.

In Dummitt, the Court considered facts involving Crane Co.’s sale of valves to the U.S. Navy for use in high-pressure, high-temperature steam pipe systems on Navy ships.  The Crane valves were packaged with bonnet gaskets and braided stem packing that contained asbestos.  Knowing that the extreme pressure and temperature of the steam systems at issue caused the packaged gaskets and packing to wear out, Crane marketed an asbestos-based sheet material known as “Cranite” that could be used to produce replacements for the original gaskets and packing.  Crane also marketed “Cranite” products for use in high-pressure, high-temperature steam systems in its own catalogs between 1923 and 1962.  Despite Crane’s executive’s becoming aware of the dangers of exposure to breathable asbestos in the early 1970s, it admitted that it never provided warnings about the hazards of exposure to asbestos dust resulting from the use of its valves and asbestos-based products, such as gaskets and packing.  The decedent, Ronald Dummitt, a former Navy boiler technician from 1960 to 1977, routinely worked with Crane’s valves, which were often repaired with asbestos-based gaskets and packing designed and manufactured by companies other than Crane.  After being diagnosed with pleural mesothelioma in 2010, Dummitt brought suit against Crane and 67 other defendants who manufactured asbestos-based gaskets and packing, alleging in part that Crane had acted negligently in failing to warn Dummitt of the hazards of asbestos exposure from the components used with its valves, and that such negligence was a proximate cause of his illness. 

Similarly, in Suttner, Crane sold valves to General Motors (GM) for use in similar high-pressure, high-temperature steam systems in its plants during the 1930s.  Crane admitted to having possibly supplied asbestos-based gaskets and packing to GM and Crane’s own schematics for the valves specified the use of asbestos-based gaskets and packing.  Crane’s own catalogs from 1936 and 1955 also recommended the use of “Cranite” on its valves for high-pressure, saturated or superheated steam.  The decedent, Gerald Suttner, worked as a pipe fitter at GM’s Tonawanda Engine Plant from 1960 to 1979.  The plant had a steam pipe system featuring Crane valves with third-party gaskets and packing materials.  He too was diagnosed with pleural mesothelioma in 2010 and likewise asserted a failure to warn claim against Crane regarding the hazards of the combined use of Crane valves with asbestos-based third-party products.

First noting that a failure-to-warn claim, whether grounded in strict liability or negligence, is functionally equivalent, the Court set out to determine whether an applicable legal duty to warn was owed by Crane.  To discern whether a duty existed, the Court looked to settle upon the most reasonable allocation of risks, burdens and costs among the parties and within society, accounting for the economic impact of a duty, pertinent scientific information, the relationship between the parties, the identity of the person or entity best positioned to avoid the harm in question, the public policy served by the presence or absence of a duty and the logical basis of a duty.  Finally, the Court looked to the foreseeability of the harm at issue to define the scope of the duty once recognized.  Relying heavily on the Court’s reasoning and analysis in Rastelli, the Court provided the following rule:  the manufacturer of a product has the duty to warn of the danger arising from the known and reasonably foreseeable use of its product in combination with a third-party product which, as a matter of design, mechanics or economic necessity, is necessary to enable the manufacturer’s product to function as intended. 

In coming to this rule, the Court emphasized the role of the manufacturer’s product in creating a market for the third-party made component, stating that where a manufacturer creates a product that cannot be used without another product as a result of the design of the product, the mechanics of the product or the absence of economically feasible alternative means of enabling the product to function as intended, the manufacturer has a substantial, albeit indirect, role in placing the third-party product in the stream of commerce.  In other words, when the manufacturer produces a product that requires another product to function, the manufacturer naturally opens up a profitable market for that essential component, thereby encouraging the other company to make that related product and place it in the stream of commerce.  Thus, the court found that because the manufacturer’s product is critical to the dangerous joint use of the two products, it does substantially create a defective condition insofar as both products combine to generate a defective and dangerous condition.     

Although this decision will certainly not be viewed favorably by those defending manufacturers in asbestos exposure cases, by adopting the “design, mechanics or economic necessity” test, the Court provides us with a roadmap to success when defending a manufacturer where a particular set of circumstances exist.  On behalf of a manufacturer who did not specifically recommend and/or provide an asbestos component for the product in question and the use of such a component would have entirely been the choice of the end user, it can be argued that Dummitt supports the position that such a defendant can rightfully claim that there is no duty to warn.