Heather Isringhausen Gvillo Feb. 11, 2014, 6:52pm

PHILADELPHIA (Legal Newsline) - Several shipbuilders were recently granted summary judgment in an asbestos lawsuit on the basis that a Navy ship is not a "product" for purposes of strict product liability.

Judge Eduardo C. Robreno of the National Asbestos Products Liability Multidistrict Litigation Docket of the U.S. District Court for the Eastern District of Pennsylvania granted the defendant shipbuilders' motion for summary judgment on strict product liability, but denied their motion for summary judgment regarding negligence claims.

Robreno filed a memorandum detailing his decision on Jan. 28, followed by two separate opinions focusing on each summary judgment request.

"Negligence law focuses on the reasonableness of defendants' conduct, while strict liability focuses on defendants' product without regard to conduct or fault," Robreno wrote.

"The court holds that, under maritime law, a builder of a Navy ship... is liable in negligence if it failed to exercise reasonable care under the circumstances," he added. "On the other hand, defendants' motions for summary judgment on plaintiffs' strict liability claims are granted because... a Navy ship is not a product within the meaning of strict product liability law."

The opinion addressed defendants General Dynamics Corporation, Huntington Ingalls Incorporated and Puget Sound Commerce Center, Inc.'s summary judgment request.

Claimant David Filer originally filed his suit in California before it was transferred to the MDL.

In his lawsuit, he claims he was exposed to asbestos from insulation installed by the defendants while serving in the U.S. Navy aboard naval ships.

In his claims against the defendants, he alleges they are liable for failing to warn him of the hazards of asbestos-containing products manufactured by others but installed by the defendants.

However, each defendant counters those arguments, claiming they "had no duty to warn regarding the various asbestos-containing products it installed aboard ships it built for the Navy."

In the lawsuit, the defendants allege maritime law or California law is appropriate in awarding summary judgment.

The court responded by ruling out state laws due to the location of the litigation and instead focused on maritime law.

"In order for maritime law to apply, a plaintiff's exposure underlying a product liability claim must meet both a locality test and a connection test," Robreno wrote.

The locality test requires that asbestos exposure or injury occur on navigable waters, which means work must be performed aboard a ship that is docked at a shipyard or takes place on dry dock.

The connection test is valid when a worker whose claims meet the locality test was primarily sea-based during the asbestos exposure.

Robreno stated that because there is no controlling statute that applies here regarding the connection test, the court had to locate an answer within maritime common law.

"Before the court is the issue whether, under maritime law, a builder of Navy ships is liable under a negligence theory for asbestos-related injuries arising from products it installed aboard a ship," he wrote.

The defendants allege the "sophisticated user" defense bars them from liability, and instead passes the torch to the manufacturer.

Under the "sophisticated user" defense, the manufacturer or supplier of a product has the burden of demonstrating that either the purchaser of a product or the individual using the product was "sophisticated" about the hazards of the product, which relieves the manufacturer of liability for injury arising from the product.

According to maritime law, a "sophisticated user" defense serves to bar negligent failure-to-warn claims, but not strict liability claims.

The court explained that strict liability focuses on the product without regard to conduct or fault and that the duty to warn doesn't depend on a user's knowledge or sophistication, while the negligence law focuses on the reasonableness of the defendants' conduct.

"As part of its analysis in reaching this decision, the court determined that the role of the builder of Navy ships was more like a provider or a service (assembly of an assortment of products) than a manufacturer or supplier of a product," Robreno wrote.

Ultimately, the court concluded that the manufacturers of the asbestos-containing products bear the burden of preventing harm to the workers.

"The court explained that, as a matter of policy, to impose upon a Navy shipbuilder potential strict liability for each of the thousands of products assembled in a Navy ship pursuant to Navy specifications, would be an undue, unmanageable, and cumulative burden likely to discourage the activity of shipbuilding," Robreno stated.

The defendants claim it is unclear whether a Navy shipbuilder has a duty to warn of asbestos hazards to those who work aboard the ships it builds.

However, the plaintiff claims the issue is whether the defendants' failure to warn constitutes common law negligence or a breach of duty. Filer further argues any warnings that were present were obscured during the installation process with paint and other carpentry.

Robreno clarified the argument, stating that shipbuilders may still hold some responsibility.

"It is true that the court found that a Navy shipbuilder is not a 'manufacturer' or 'supplier' of a product with respect to the ship as a whole for purposes of strict product liability law," Robreno stated. "However, the court holds now that it is a different inquiry whether, for purposes of negligence law, a Navy shipbuilder is a 'supplier of the various products installed aboard the ship.'"

Nevertheless, the defendants responded by saying they had reason to believe that the Navy knew of the risks surrounding asbestos when they commissioned the ships.

"The court has already recognized that the sophisticated user defense and the government contractor defense insulate defendants from liability under certain circumstances," Robreno wrote.

The court ruled that it is true that the defendants had reason to believe the Navy was aware of the dangers of asbestos-containing products; however, they "conflate the issue of duty with whether they are excused from any breach of their duty to exercise reasonable care under the circumstances."

"It is whether defendants breached that duty which is at issue here, and not the existence of a duty," Robreno continued.

The defendants further point out the inconsistency with the "bare metal defense," which pertains to cases in which products and component parts are incorporated into each other or designed to be used in combination with each other.

Because a ship is not a product, the various products installed therein are not component parts of the ship; and they are not products designed to be used in connection with each other.

Ultimately, the court determined that the defendants have not identified any authority indicating that they are relieved from negligence liability under maritime law, nor did they behave reasonably with respect to providing warnings regarding the various toxic materials on board the ships.

"Therefore, the court declines to adopt the sweeping proposition set forth by defendants that builders of Navy ships can never face negligence liability under any circumstances and are instead immune from all liability surrounding all of their activities," Robreno wrote. "Rather, applying the general rule of law, defendants owed plaintiffs a duty of reasonable care under the circumstances."

The court concluded that their ruling is reasonable and consistent with prior decisions.

"Where a Navy shipbuilder has behaved reasonably under the circumstances, it will not incur negligence liability; and where it has not behaved reasonably under the circumstances, negligence liabilities not unwarranted," Robreno stated.

"The court concludes that, under maritime law, a builder of a Navy ship is liable in negligence if it failed to exercise reasonable care under the circumstances and that such failure caused injury to the plaintiff - and that this is true regardless of the fact that a Navy shipbuilder cannot be liable under a theory of strict liability due to the fact that a Navy ship is not a 'product' for purposes of strict product liability," Robreno added.

From Legal Newsline: Reach Heather Isringhausen Gvillo at asbestos@legalnewsline.com

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