Daily Blast October 29, 2013

Yesterday, the California Court of Appeal, Second Appellant District, Division Four (Los Angeles) issued an opinion in Pfeifer v. John Crane, Inc. (Oct. 29, 2013, B232315) __ Cal.App.4th ___, analyzing whether a manufacturer who sells its products to a sophisticated intermediary user has a duty to warn the sophisticated user’s employees of the hazards of its products. The Court of Appeal held “that when a manufacturer provides hazardous goods to a ‘sophisticated’ intermediary that passes the goods to its employees or servants for their use, the supplier is subject to liability for a failure to warn the employees or servants of the hazards, absent some basis for the manufacturer to believe the ultimate users know or should know of the hazards.” (Slip opn., p. 2.)

Plaintiffs, a former employee of the Navy and his wife, asserted claims for negligence, strict liability and loss of consortium against defendant manufacturer alleging its asbestos-laden products used by the Navy caused the employee’s mesothelioma. (Slip opn., p. 2.) During trial, the manufacturer proposed a sophisticated user defense jury instruction, which stated “that a defendant has no duty to warn a sophisticated user or its employees of the potential hazards of its products, and that the employees of a sophisticated user are ‘deemed’ to be sophisticated users.” (Id. at p. 20.) The court rejected the manufacturer’s proffered instruction. (Id. at p. 2.) The jury returned a verdict in favor of plaintiffs. Judgment was entered awarding plaintiffs compensatory and punitive damages. The manufacturer appealed challenging the trial court’s decision to reject its proposed jury instructions regarding the sophisticated user defense. (Ibid.)

The Court of Appeal concluded that the trial court properly declined the manufacturer’s proposed jury instructions. (Slip opn., p. 28.) Generally, “‘is not liable to a sophisticated user of its product for failure to warn of a risk, harm, or danger, if the sophisticated user knew or should have known of that risk, harm or danger.’” (Id. at p. 18 quoting Johnson v. American Standard, Inc. (2008) 43 Cal.4th 56, 71.) “inquiry focuses on whether the plaintiff knew, or should have known, of the particular risk of harm from the product giving rise to the injury.’” (Ibid.) The appellate court explained that the issue here concerned the employee’s knowledge rather than an intermediary’s sophistication. (Id. at p. 26.) It was undisputed that the manufacturer provided no warnings to the Navy. (Id. at p. 21.) An intermediary’s sophistication does not shield the suppliers from liability to the intermediary’s employees. (Id. at pp. 26-27.) The Court of Appeal affirmed the trial court’s order rejecting the sophisticated user defense jury instruction. (Id. at p. 28.)

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