Daily Blast October 22, 2014

The California Court of Appeal, First Appellate District, Division Two (San Francisco), published its opinion in Gottschall v. Crane Co. (Oct. 22, 2014, A136516) ___ Cal.App.4th ___, analyzing whether a Pennsylvania federal court properly applied California’s sophisticated user defense and whether the Pennsylvania court’s grant of summary judgment against plaintiffs collaterally estopped plaintiffs from bringing their second lawsuit. The Court of Appeal held that collateral estoppel did not apply because the Pennsylvania federal court improperly applied an intermediary sophisticated user defense. According to the court, “[the] fact that the user is an employee or servant of the sophisticated intermediary cannot plausibly be regarded as a sufficient reason, as a matter of law, to infer that the latter will protect the former.” (Slip opn., p. 10, quoting Pfeifer v. John Crane, Inc. (2013) 220 Cal.App.4th 1270, 1296-1297, fn. omitted.)

The case arose from the death of Robert Gottschall from mesothelioma allegedly inflicted during his work in shipyards and similar places. (Slip opn., p. 1.) The decedent’s heirs and family filed two separate lawsuits against separate defendants. One action was filed in the San Francisco Superior Court against Crane Company and other defendants. The other action against General Dynamics Corporation was transferred to a Pennsylvania federal court. The Pennsylvania federal court granted summary judgment in favor of General Dynamics based upon the sophisticated user defense. General Dynamics had been sued because it supplied the U.S. Navy vessels with asbestos-containing materials. The Pennsylvania court concluded that the Navy was a sophisticated user of asbestos-containing material and therefore plaintiffs’ claims against General Dynamics failed. Crane Company then moved for summary judgment in the San Francisco Superior Court action on the basis that the Pennsylvania federal court’s grant of summary judgment in favor of General Dynamics collaterally estopped plaintiffs from bringing this action. (Ibid.) The San Francisco Superior Court agreed and granted defendant’s summary judgment motion.

The California Court of Appeal held that the Pennsylvania federal court improperly applied California’s sophisticated user defense. (Slip opn., p. 6.) In essence, the Pennsylvania federal court applied a sophisticated intermediary defense. The court explained that the sophisticated intermediary doctrine, “where it applies at all, applies only if a manufacturer provided adequate warnings to the intermediary.” (Id. at p. 8, quoting Stewart v. Union Carbide Corp. (2010) 190 Cal.App.4th 23, 28-30.) According to the court, Johnson v. American Standard, Inc. (2008) 43 Cal.4th 56, “did not impute an intermediary’s knowledge to the plaintiff, or charge him with any knowledge except that which had been made available to him through his training and which, by reason of his profession and certification, he should have had.” (Slip opn., p. 8.) Defendants had produced no such evidence in this case. According to the court, “in actions by employees or servants, the critical issue concerns their knowledge (or potential knowledge), rather than an intermediary’s sophistication.” (Id. at p. 10.) Thus, the Pennsylvania federal court case did not have collateral estoppel effect because the Pennsylvania court improperly applied California’s sophisticated user defense. (Id. at pp. 9-10.)