In its decision Tuesday, the U.S. Supreme Court held, under maritime law, that manufacturers can be held liable for injuries caused by asbestos-containing parts manufactured and added to their products by third parties. The case, Air & Liquid Systems Corp. v. DeVries, involved Navy sailors who were allegedly exposed to asbestos that was used with certain equipment on the Navy vessels to which they were assigned. The sailors claimed this exposure ultimately caused their cancer. The sailors brought suit against the manufacturers of equipment such as pumps, blowers, and turbines, alleging that the manufacturers were negligent in failing to warn them about the dangers of asbestos.

Many of the manufacturers delivered their equipment to the Navy without asbestos. Instead, it was the Navy that added the asbestos components at issue. In particular, Air & Liquid Systems Corp., CBS Corp., Foster Wheeler LLC, Ingersoll Rand PLC, and General Electric Company, asserted that their products did not contain asbestos when received by the Navy. These manufacturers relied on the “bare metal defense,” arguing that their products as-supplied contained only “bare metal,” and they should not be liable for injuries caused by third-party components installed at a later date.

Plaintiffs argued that these products were designed for use with asbestos insulation, that the equipment would not have functioned properly without it, and that the manufacturers knew or should have foreseen that asbestos would be added to the equipment prior to its use. Because the products required the incorporation of asbestos parts to function, Plaintiffs contended that the manufacturers had a duty to warn about the dangers of asbestos exposure from these parts even if those manufacturers did not supply them.

In 2014, the district court in Philadelphia agreed with the manufacturers and granted them summary judgment. Three years later, the U.S. Court of Appeals for the Third Circuit reversed and remanded this decision. The Third Circuit stated that manufacturers may face liability for third-party components if the injury was “reasonably foreseeable.” Ultimately, as discussed in greater detail below, this ruling was upheld while simultaneously rejecting the “reasonably foreseeable” test utilized by the Third Circuit.

In a 6-3 decision, the Supreme Court held that under maritime law, “a product manufacturer has a duty to warn when its product requires incorporation of a part, the manufacturer knows or has reason to know that the integrated product is likely to be dangerous for its intended uses, and the manufacturer has no reason to believe that the product’s users will realize that danger.” The Supreme Court specified that a product is considered to require the integration of a third-party component if the manufacturer: (1) specifically directs that the part be incorporated; (2) makes the product with a component that the manufacturer knows will require replacement with a similar part; or (3) makes a product that would be useless without the added component. Because the parts in question would not have functioned safely or properly without the presence of the third-party components, the Supreme Court imposed the manufacturers with a duty to warn users of potential dangers of these components.

In reaching its decision, the Court declined to adopt the “foreseeability rule” proposed by Plaintiffs. Such a rule would require manufacturers to warn about any products that could foreseeably be used with their products, even when the third-party part was not required or specified by the manufacturer. The Supreme Court noted that such a rule would “sweep too broadly” and would be far too costly for manufacturers while “simultaneously overwarning users.” The Court similarly rejected an absolute bar under the “bare metal defense” as going too far in the other direction.

The Supreme Court adopted an approach that falls between these two extremes. The Court stated that the approach it adopted in this decision “imposes on the manufacturer a duty to warn when its product requires incorporation of a part and the manufacturer knows or has reason to know that the integrated product is likely to be dangerous for its intended uses.” The Court noted that this approach strikes a balance between the “foreseeability rule” and “bare metal defense” by only requiring a warning from a manufacturer “when its product requires a part in order for the integrated part to function as intended,” (emphasis in original).

The Supreme Court carefully reiterated that its ruling in this case is confined to maritime law which contains special heightened standards regarding the welfare of sailors. The vast majority of asbestos claims are brought under state law.

The case is Air and Liquid Systems Corp. et al. v. DeVries, Case No. 17-1104, in the U.S. Supreme Court. Justice Gorsuch filed a dissenting opinion, in which Justices Thomas and Alito joined, arguing that the district court was correct when it granted judgment for defendants under the “bare metal defense.”

For more information on this case, please contact Jackson Otto or Jen Dlugosz. This article was published as part of the Toxic Tort Monitor. You can read the full edition here.