Michael Dumalag
Professor Sabia
Law & Econ – ECON 496
24 April 2012
BARBARA J. O'NEIL et al., Plaintiffs and Appellants, v. CRANE CO. et al., Defendants and Respondents.
S177401
SUPREME COURT OF CALIFORNIA
53 Cal. 4th 335; 266 P.3d 987; 135 Cal. Rptr. 3d 288; 2012 Cal. LEXIS 3; CCH Prod. Liab. Rep. P18,765
January 12, 2012, Filed
INTRODUCTION
The Plaintiffs, family of the decedent plaintiff, Barbara J. O’Neil, filed a wrongful death complaint due to mesothelioma against the defendant manufacturers, Crane Co. et al., in concerns of valves and pumps manufactured for use on Navy warships. This particular claim raised strict liability claims and negligence claims in regards to asbestos exposure experienced by the decedent plaintiff released from external insulation and internal gaskets and packing. During World War II, defendants sold parts to the United States Navy for use in the steam propulsion systems of warships. These Steam systems were extremely hot and highly pressurized, requiring insulation. Navy specifications made use of asbestos insulation required at the time and products that did not conform to the use were rejected. However no evidence was presented that asbestos was needed in order for the valves to function properly also the defendant did not manufacture the asbestos packing gaskets used in its valves. Once parts were received by the navy, they were integrated into other components such as boilers and piping with asbestos-containing flange gaskets. However neither of the defendants produced the flange gaskets. The gaskets and packing that may have contained asbestos, inside the defendant’s valves and pumps were replaced during routine maintenance and there was no evidence of the defendants ever making or supplying replacement parts.
The plaintiff, Patrick O’Neil served on the USS Oriskany from 1965 to 1967. Among his duties, the plaintiff supervised the enlisted men who repaired equipment in the engine and boiler rooms. The work exposed him to asbestos fibers. Asbestos-containing products are not dangerous when intact, however, the health hazard arises when the products are cut or damaged, providing potential to be inhaled. Through the access and maintenance of the pumps and valves, large amounts of asbestos dust were generated. An important detail to note was that as early 1922, the navy was aware of the dangers of airborne asbestos and did not warn seaman of the hazards of working around the potentially dangerous materials nor did they advise them to wear respirators. However, there was no evidence that any of the material came from the defendants, Crane and Warren. The defendants did not manufacture the dangerous external insulation or flange gaskets in question, which were removed by the repairmen and although the defendants’ pumps contained internal asbestos-containing gaskets, as required by the Navy, these components were found to be removed before the plaintiff boarded the shop 20 years later. In 2004, the plaintiff developed mesothelioma, a cancer caused by asbestos exposure and died at age 62. In 2006, the plaintiff’s family filed a wrongful death complaint against several companies that allegedly supplied the dangerous products to the Navy.
THE JUDICIAL OUTCOME As described by the opinion of Judge Corrigan, the case involved defining the limits of a manufacture’s duty to prevent foreseeable harm related to its product. The issue in question was whether a manufacturer should be held liable for injuries caused by adjacent products or replacement parts that were made in conjunction with the defendants’’ product. The judicial outcome held that the manufactures, Crane and Warren, may not be held liable in strict liability or negligence for harm caused by another manufacturer’s product. The only case in which that would be acceptable would be if the defendants’ own product was the substantial contributor to the harm or that there was a substantial participation by the defendant in creating such harmful products. While defendants, Crane and Warren produced valves and pumps used in Navy warships, it is found that the defendants never manufactured or sold any of the asbestos-containing materials in question. However, in this case, the plaintiff did claim that defendants be held strictly liable and negligent because the dangers of the asbestos through maintenance was foreseeable when used in conjunction with their products. But the Corrigan explains in his opinion that by recognizing such claims by the plaintiff would provide an unprecedented expansion of strict products liability. While in California manufacturers are held strictly liable for a defect in the product. Yet, it has never been held that this responsibility extends to preventing injuries that would be used in conjunction with the defendants product. The dangerous features in question were not an integral part of the product’s design. Therefore through this fact, Corrigan had asserted that to decide for the plaintiff would not further the purposes of strict liability, nor would it serve public policy by requiring manufacturers to warn about the dangerous propensities of products they do not design, make or sell.
THE ECONOMIC ANALYSIS The biggest issue here and with most cases is what type of precedent is set by this case. This is particularly important when speaking in an economic standpoint on whether this case decision would be economically efficient and would it provide for such efficiencies in manufacturing needed products in the future. I believe that this ruling in fact does set a precedent for proper incentives and precaution in the future. In order to understand we must outline what strict liability encompasses in regards to products. There have been three types: manufacturing defects, design defects, and warning defects. In this case it had been undisputed that there was not a direct issue with the manufacturing of the products. Also, the design did not require the use of asbestos. The problem in question then becomes whether requiring the duty of care by the defendants to provide warning for all potential problems with the product and other product in conjunction with their own. However doing so would extend the strict liability rule to being limitless. This would in fact not create proper incentives of precaution and instead created an over precaution by manufacturers. There would be large associated costs with research and development concerning finding potential products that could be used in conjunction with the defendants and defendants alike. Also by forcing the defendants to be overcautious this would potentially force such companies like Crane and Warren to overspecialize to creating all products encompassing their own particular expertise. This in a sense is also not economically efficient because there may be others with better specialization that could in fact work in conjunction with products to provide the best and most efficient products to the public. In the worst case this would discourage companies such as Crane and Warren to even create such a potentially harmful product in the first place. By setting this type of precedent, this could then begin to encompass many other cases in the future. This over cautiousness also comes at another price, which is the over reliance of plaintiffs that the defendant would always be strictly liable. Then there would be no incentive to take absolute care and this decision would generate and inefficient amount of care by the injured. It is clear here that in such cases, manufacturers should only be held liable for defects inherently found in their own such product in order to provide for efficient incentives to create products for the public. However, what could be found in this case does that due to the navy knowing for quite some time that the asbestos was harmful; they themselves should be held liable for the duty to warn their employees about the possible dangers and provided necessary protection. Also an important note in analysis is that if the strict liability were asserted on this case, it would exert inefficient pressure on manufactures. This is due to the consideration that in general manufactures such as Crane and Warren and the manufacturers of the defective asbestos product have no continuing business relationship. If the strict liability were to be imposed it would force certain business relationships to happen that could potentially create overdependence or even create monopolies through pushing out smaller companies. It may even discourage innovation. All these factors would arise from the over extension of strict liability to the entire distribution chain of products for all product liability cases. This would increase associated costs of rescues on hand because it would define proximate cause to encompass all cases. While it is unfortunate that in this case an individual died due not being informed of potential harms, the correct group must be held liable. In this case setting this precedent, it induces proper incentives and should by definition of strict liability with products, should fine the correct person who in this case would either be the Navy or the direct producers of the gaskets and flanges.