Products Liability Law Daily Shipbuilders not liable for Navy serviceman’s asbestos-related death
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Friday, April 1, 2016

Shipbuilders not liable for Navy serviceman’s asbestos-related death

By Susan Lasser, J.D.

In an action by the heirs of a deceased Navy serviceman against two shipbuilders stemming from the serviceman’s exposure to asbestos and asbestos-containing products on the ships on which he served, judgment as a matter of law in favor of the shipbuilders on the heirs’ strict products liability and negligence claims was affirmed by a three-judge panel for the U.S. Court of Appeals for the Ninth Circuit. The panel determined that the two naval warships were not “products” for the purposes of strict products liability and that there was no genuine issue of fact as to whether asbestos-containing materials originally installed on the ships caused the serviceman’s injuries (McIndoe v. Huntington Ingalls Inc., March 31, 2016, O’Scannlain, D.).

In the 1960s, the Navy serviceman served aboard two U.S. Navy ships which contained pipe insulation made from asbestos. One ship, an aircraft carrier, was built by a predecessor in interest to Huntington Ingalls Inc. (Huntington); and another ship, a guided missile cruiser, was built by Bath Iron Works Corporation (Bath). On each ship, the sailor was allegedly present during maintenance work involving the removal of pipe insulation that caused asbestos fibers to float in the air that he breathed. The serviceman died in September 2011 from complications related to mesothelioma. His legal heirs filed suit against Bath and Huntington, arguing that the serviceman’s exposure to asbestos-containing materials aboard their ships contributed to his death. The heirs raised design, manufacture, and failure-to-warn claims based on theories of both strict products liability and general negligence. The district court granted the shipbuilders’ motions for summary judgment on the grounds that the ships were not products for purposes of strict liability and that the heirs could not establish a genuine issue of material fact as to whether the shipbuilders were responsible for installing any asbestos-containing insulation that caused the serviceman’s injuries. The heirs appealed and the cases consolidated. Federal maritime law, which the U.S. Supreme Court has recognized incorporates actions for products liability, including those that sound in strict liability, is the governing law.

Is a naval warship a product? The appellate panel agreed with the lower court’s finding that the heirs could not sustain an action for strict products liability based on the warships being “products” under maritime law. The heirs argued that the shipbuilders should be held strictly liable for defects in materials originally installed on the ships they built. The appellate panel, noting that the question of whether a naval warship is to be considered a “product” in the context of a strict products liability claim was one of first impression for the federal courts of appeals, looked to the Restatement (Third) of Torts for guidance. The Third Restatement defines a “product” subject to strict liability as “tangible personal property distributed commercially for use or consumption.” It also states that only when the injury in the case “was allegedly caused by a defect in something within this … definition of ‘product’ should the defendant manufacturer or seller be strictly liable for the harm caused,” and injuries caused by other items would be actionable only under misrepresentation, negligence, or another liability theory.

The panel concluded that because warships were never “distributed commercially,” they were excluded “from the realm of strict products liability.” This was reinforced by the underlying policy of strict liability, which is to “plac[e] responsibility on the … party most able to prevent harm” caused by dangerous products and, therefore, to incentivize proper “design and quality control” of such products. Strict liability is, thus, imposed on the party best able to protect individuals from hazardous products.

However, imposing liability on the builder of a custom-ordered naval ship would not advance the policy goals of strict liability, according to the appellate panel. The ship was built under government contract and may not have been designed by the builder, but rather may have been designed by the government or another outside professional. Moreover, the shipbuilders did not manufacture—and, thus, had little control over the quality of—the thousands of component parts installed on each ship. Nor did they account in their pricing for the seeming unlimited liability that could result from a rule holding them strictly liable for the dangers from all of these component parts. According to the panel, federal maritime law, “the primary goal of which is to protect and to promote the “smooth flow of maritime commerce,” would not permit/approve of “such a sweeping grant of liability.”

Negligence. The panel also held that the heirs’ general negligence claims failed. The family could not show that the serviceman’s injuries were caused by exposure to asbestos that was attributable to the shipbuilders’ conduct. This required a showing that the decedent was actually exposed to asbestos-containing materials that were installed originally by the shipbuilders and that the exposure was a substantial contributing factor in causing his injuries. The heirs offered the first-hand observations by two lay witnesses to demonstrate exposure and, based on these observations, the opinion of an expert. The lay witness testimony put the serviceman in the vicinity of the removal of pipe insulation on both ships and was the only direct evidence presented to support the claim that the pipe insulation was removed in the serviceman’s presence. The panel found the witnesses’ recollections nearly 50 years after the alleged exposure to be “rather implausible.” To these direct accounts, the heirs’ expert, a professional asbestos consultant who worked aboard hundreds of naval ships as a pipe insulator. The panel found that the consultant only added his speculation as to what materials the serviceman may have encountered and had no actual knowledge of the serviceman’s activities aboard the ships. Nonetheless, viewing the statements in the light most favorable to the plaintiffs, the court concluded that a jury coulddetermine that the serviceman was exposed to originally installed asbestos, even if it seemed unlikely that a jury would do so. Thus, this evidence created a genuine issue of fact regarding whether the sailor at least was exposed to asbestos from the shipbuilders’ materials.

Substantial contributing factor. However, the panel ruled that even if the evidence established that the serviceman was actually exposed to asbestos installed by the shipbuilders, his heirs could not show that any such exposure was a substantial contributing factor to his injuries. Without direct evidence of causation, the heirs had to satisfy the substantial-factor test by showing that the decedent had substantial exposure to the relevant asbestos for a substantial period of time. The heirs failed to put forward such evidence—presenting no evidence as to the amount of exposure to dust from originally installed asbestos, or the duration of such exposure during any of the incidents described by the witnesses. Without these facts, the panel said, the serviceman’s heirs could only speculate as to the actual extent of the serviceman’s exposure to asbestos from the shipbuilder’s materials. More was required.

Further, the panel agreed with the district court’s rejection of the heirs’ argument that evidence of the decedent’s prolonged exposure was unnecessary because they presented the opinion of a medical expert who asserted that every exposure to asbestos above a threshold level was necessarily a substantial factor in the contraction of asbestos-related diseases. Seemingly the expert’s testimony, in addition to attempting to replace the substantial factor test with an “every exposure” theory of asbestos causation, aimed more to establish a legal conclusion—what general level of asbestos exposure was required to show disease causation—than to establish the facts of the serviceman’s injuries. Moreover, the “unbounded liability” of such a theory was what the substantial factor test was developed to limit. Thus, because the heirs’ argument would undermine the substantial factor standard and, in turn, significantly broaden asbestos liability based on minimal encounters with a defendant’s product, the panel rejected the argument. Therefore, the heirs failed to put forward evidence demonstrating that the serviceman was substantially exposed to asbestos from the shipbuilders’ materials for a substantial period of time, and they failed to establish a genuine issue of fact regarding whether any such exposure was a substantial factor in the serviceman’s injuries. Consequently, the heirs could not prevail on their general negligence claims.

The cases are Nos. 13-56762 and 13-56764.

Attorneys: Richard M. Grant (Brayton Purcell LLP) for Carol McIndoe. Jeffrey Charles Sindelar, Jr. (Tucker Ellis LLP) for Huntington Ingalls Inc., f/k/a Northrop Grumman Shipbuilding, Inc. Edward R. Hugo (Brydon Hugo & Parker) for Bath Iron Works Corp.

Companies: Huntington Ingalls Inc., f/k/a Northrop Grumman Shipbuilding, Inc.; Bath Iron Works Corp.

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