Products Liability Law Daily Court won’t rethink preclusion of fragrance oil makers’ OSHA-based defenses in industrial fire case
Wednesday, September 19, 2018

Court won’t rethink preclusion of fragrance oil makers’ OSHA-based defenses in industrial fire case

By Susan Engstrom

In an action stemming from an industrial fire allegedly caused by defective fragrance oil, a Pennsylvania federal court refused to reconsider its previous ruling precluding the product’s manufacturers from asserting defenses based on the building owner’s alleged violations of Occupational Safety and Health Administration (OSHA) regulations and other safety/industry standards. The companies’ proffered evidence was not relevant to causation, the owner’s alleged reckless conduct in failing to protect against fires, the building owner’s mitigation of damages, or a risk-utility analysis, the court found, also declining to revisit its decision precluding the manufacturers’ OSHA safety expert from testifying as to the owner’s alleged safety violations (Dyvex Industries, Inc. v. Agilex Flavors & Fragrances, Inc., September 18, 2018, Mannion, M.).

Dyvex Industries, Inc., which used fragrance oils as an ingredient to manufacture fragrant plastic pellets, experienced an industrial fire allegedly caused by Perfectly Pomegranate Gras Oil (PPG). The fire caused extensive damage to the plant and surrounding property, resulting in a lengthy operational shut-down. As a result, Dyvex filed suit against three fragrance oil makers—Agilex Flavors & Fragrances, Inc., Aromatic Technologies, Inc., and Aroma Tech—alleging that the PPG oil was defective and created an unreasonable risk of fire. Dyvex asserted causes of action for negligence, strict liability, and breach of implied and express warranty. The oil makers responded by seeking to offer evidence establishing that the fire had been caused by Dyvex’s own negligence in failing to comply with OSHA standards and applicable building and fire codes.

Prior rulings. In a previous decision, the court ruled that the oil makers could not assert defenses based on alleged safety and building code violations, finding that the building owner owed no duty to the companies to comply with OSHA standards or state and local building codes [see Products Liability Law Daily’s March 1, 2018 analysis]. In a subsequent ruling, the court precluded the oil makers’ expert from testifying on the owner’s alleged noncompliance with the above-mentioned standards. In the current case, the manufacturers asked the court to reconsider both decisions.

Safety/building code standards. The oil makers argued that evidence of the building owner’s conduct and whether it complied with the stated safety standards was relevant to: (1) the issue of causation; (2) the owner’s alleged reckless conduct in failing to protect against fires; (3) Dyvex’s mitigation of damages; and (4) a risk-utility analysis. Specifically, the manufacturers contended that the owner’s reckless conduct in failing to protect against a known risk in the nature of fires was admissible for purposes of the assumption of risk defense and that the owner’s conduct was relevant to the fifth factor of the risk-utility analysis, which requires an assessment of the "user’s ability to avoid the danger by the exercise of care in the use of the product." With respect to mitigation, the manufacturers pointed to evidence showing that the owner had experienced prior fires at its facility that were not related to its processing of the at-issue fragrance oils and that the owner had a "non-delegable duty to provide a safe work environment."

Negligence. According to the court, even if the building owner’s alleged conduct amounted to negligence, that conduct was "irrelevant to determining whether the potential risks of putting the product into the market outweighed the potential utility of the product as designed." Nor was the owner’s alleged failure to protect against fires relevant to causation, as it did not amount to misuse or highly reckless conduct. The oil makers’ proffered evidence did not show that the owner had failed to exercise care in using the PPG oil on the night of the fire or that it had engaged in highly reckless conduct in processing the oil; rather, the evidence related to the owner’s pre-fire conduct regarding the compliance of its facility with safety standards and regulations. To the extent that it would be relevant with respect to its strict liability claim, the owner’s conduct related to its use of the PPG oil and not to its operation of the facility, the court said.

Assumption of risk. Regarding the building owner’s alleged failure to protect against fire, the court saw no evidence that the owner knew of the alleged defect in the PPG oil (i.e., a low flash point), assumed the risk, and still decided to process the oil. Thus, the court refused to provide a jury instruction on the oil makers’ assumption of risk defense.

Mitigation of damages. With respect to mitigation of damages, the manufacturers sought to proffer evidence that some of the damages from the fire could have been avoided with reasonable effort and without undue risk and expense if the building owner had complied with industry standards and building code safety requirements. In the court’s view, the proper inquiry as to the owner’s duty to mitigate its damages was whether it took reasonable efforts to mitigate damages after the fire, i.e., at the time the problem was presented, and not on the owner’s pre-fire conduct regarding whether its facility complied with safety standards. Accordingly, the manufacturers’ motion for reconsideration of the court’s previous orders was denied.

The case is No. 12-CV-979.

Attorneys: Howard A. Rothenberg (Herlands Rothenberg & Levine) and Steven L. Smith (Law Offices of Steven L. Smith, PC) for Dyvex Industries, Inc. John J. Snyder (Rawle & Henderson, LLP) for Agilex Flavors & Fragrances, Inc., Aromatic Technologies, Inc. and Aroma Tech.

Companies: Dyvex Industries, Inc.; Agilex Flavors & Fragrances, Inc.; Aromatic Technologies, Inc.; Aroma Tech

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