Sophisticated Intermediary Doctrine Adopted By California High Court
The court’s decision was highly anticipated.
In May 2016, the Supreme Court of California issued an important decision in the product liability arena. In Webb v. Special Electric Company, Inc., a case in which asbestos was used as a component of a manufactured product - cement piping - the court explicitly adopted the sophisticated intermediary doctrine as a valid defense in California product liability cases.
The case involved a piping-distributor employee who worked in the 1970s handling dusty cement piping that had no warning label and which contained asbestos. He was not warned that the dust could be cancerous, nor was he told to wear a respirator. Three decades later, he developed mesothelioma, a fatal, asbestos-caused cancer of the lining of internal organs, usually of the lungs.
The decision provides a detailed explanation of California product liability law concerning the failure of sellers in the manufacturing and distribution chain to warn end users of inherent dangers in a product.
In California, every seller in the distribution chain of a product has the duty to warn potential users of the product's hazards. The question before the Supreme Court was the extent of the legal duty of the supplier, Special Electric Company, of raw asbestos to Johns-Manville Corporation, the piping manufacturer, "to warn ultimate users of the finished product about risks related to the raw material."
Setting significant legal precedent, the court adopted the defense called the sophisticated intermediary doctrine. This defense allows a supplier of material incorporated into a product to satisfy its duty to warn end users of the "known or knowable risks of harm" from the product after it leaves the manufacturer and enters the stream of commerce if:
- The supplier either gave adequate warnings to its immediate buyer; or
- Sold to a "sufficiently sophisticated" intermediate buyer that the supplier knew was aware or should have been aware of the danger; and
- Reasonably relied on that buyer to warn end users
What is "reasonable reliance" depends on the circumstances, considering:
- How grave the risks are, considering the nature of the material supplied
- How likely it is that the intermediary party will pass on the warning, considering its reliability, reputation, knowledge of the harm and "willingness, and ability, to communicate adequate warnings to end users"
- How feasible it is for the supplier to effectively warn an end user, considering the difficulty of a supplier having any ability to label the end product or to know the identity of ultimate consumers
Although the court adopted the sophisticated intermediary doctrine, when it applied the defense to the case at hand, it found that the defendant asbestos supplier had not successfully asserted the defense. In finding that the trial court should not have granted judgment for Special Electric notwithstanding the jury's verdict against it, the court noted, among other things, that the jury could reasonably have found, based on the evidence, that Johns-Manville was not a reasonably reliable intermediary that could have been relied on to adequately warn end users of the dangers of asbestos in the piping.
Indeed, the court pointed out testimony from a former employee that the manufacturer had not even warned its own employees of asbestos danger before the mid-1970s.
Any company facing claims of a failure to warn regarding allegedly dangerous or defective products should consult with its product liability lawyers with regard to the applicability of the sophisticated user defense to the company's products.
The attorneys of Yoka & Smith, LLP, from offices in Los Angeles, represent businesses of all sizes and types in defense of product liability claims in California and nationally.