The New Jersey Supreme Court extended the scope of liability for asbestos this week, in the case of Whelan v. Armstrong International, Inc. It was another step in the ongoing search for solvent defendants with capacity to pay for asbestos-related injuries, now including manufacturers who concededly had not manufactured the asbestos causing plaintiff’s injury. The decision was authored by Justice Albin, and countered by a dissent by Justice Patterson, joined by Justice Fernandez-Vina.
The Court considered the responsibility of manufacturers of parts containing asbestos components, where those asbestos parts had been replaced at some point with asbestos parts produced by other, unknown manufacturers.
There was agreement that the manufacturer had a duty to warn of the potential danger, both for their own product and replacement parts. But the Court was divided on the question of medical causation – whether a manufacturer could be liable “for injuries from equipment (the asbestos insulation) that they did not make, sell or distribute.”
Justice Albin explained that the extended duty to warn was consistent with “our developing common law jurisprudence, guided by principles of public policy and equity.” Where defendants “manufacture or distribute products that, by their design, require the replacement of asbestos-containing components with other asbestos-containing components during the ordinary life of the product” they have a duty to give “adequate warnings to the ultimate user.”
The Court further held that for strict liability purposes, the product at issue is “the aggregation of all its component parts.” “No distinction is made between the original asbestos-containing components and the asbestos-containing replacement components necessary for the continued operation of defendants’ integrated products—even though the replacement components are manufactured or distributed by a third party.”
Justice Patterson objected to the conflation of the duty to warn with the separate element of medical causation. In her dissent, she wrote that the majority’s decision constituted “an unwarranted change in the longstanding standard for the medical causation element of an asbestos failure to warn claim.”
Justice Patterson emphasized that New Jersey’s common law has a well-established two-part test for causation in a toxic-tort claim based on an alleged failure to warn. The plaintiff must first establish “product-defect causation” – that the product “was defective for some reason, the reason in occupational exposure cases usually being failure to warn, and that the defect caused harm.” And, critically, the plaintiff must also prove “medical causation – that the plaintiff’s injuries were proximately caused by exposure to the defendant’s product.” The second component of the causation requirement, she wrote, was lacking where the asbestos component had been replaced by a part produced by another manufacturer. Liability should extend “only to those defendants to whose products the plaintiff can demonstrate he or she was intensely exposed.”
The decision follows a US Supreme Court decision from last year, where a divided Court considered the question of “duty to warn” for purposes of federal common law for maritime law purposes. There, Justice Kavanaugh wrote the majority opinion finding that a manufacturer of a “bare metal” part that was known to require an asbestos component had a duty to warn. Consistent with the “Restatement of Torts,” a manufacturer has a duty to warn if it “knows or has reason to know’ that the product ‘is or is likely to be dangerous for the use for which it is supplied.”
Justice Gorsuch wrote for the dissent, objecting to the duty to warn as applied to “bare metal” manufacturers but noting that “there’s a colorable argument that their responsibility didn’t end when the Navy, as part of routine upkeep, swapped out the original asbestos parts for replacements supplied by others.
Under traditional tort principles, he wrote, “the seller of a defective, ‘unreasonably dangerous’ product may be liable to an injured user if the product is expected to and does reach the user without substantial change in the condition in which it is sold.” He added that “replacing worn-out parts every now and then with equivalently dangerous third-party parts may not qualify as a ‘substantial change’ if the replacement part does ‘no more than perpetuate’ problems latent in the original.” He emphasized, however, that the Court’s analysis does “not purport to define the proper tort rule outside of the maritime context.”
It remains to be seen how the holding in this case might affect the causation analysis both in future asbestos litigation and in non-asbestos toxic tort claims. Justice Patterson’s warning that the holding “disincentives litigants from undertaking the product-identification discovery…that could reveal the identity of the replacement part’s actual manufacturer” is certainly of concern. The weakening of the medical causation requirement, potentially opening the door to a sort of “enterprise liability,” even more so.