New Jersey Reverses Course on Bare Metals Defense

The New Jersey Appellate Division recently published an opinion significantly affecting asbestos litigation and defenses available to certain product manufacturers. In Whelan v. Armstrong International Inc., No. A-3520-13T4 (Aug. 6, 2018) the court changed the landscape related to the “bare metal defense,” breaking from prior law regarding the scope of a manufacturer’s liability for injuries caused by exposure to asbestos-containing components or replacement parts in their products supplied by third parties.

The bare metal defense insulates a manufacturer of a product from liability for injuries caused by an individual’s exposure to another company’s asbestos-containing aftermarket replacement parts.

The Appellate Division considered “whether a manufacturer has a duty to warn about the risk of harm from exposure to asbestos-containing replacement parts integral to the function of the manufacturer’s product, even if the manufacturer did not fabricate or distribute the replacement parts,” and concluded, consistent with recent precedent, that “a duty to warn exists when the manufacturer’s product contains asbestos components, which are integral to the function of the product, and the manufacturer is aware that routine periodic maintenance of its product will require the replacement of those components with other asbestos-containing parts.” But the court expanded liability for injuries caused by replacement parts by including, in determining causation, consideration of the exposure to the replacement parts in evaluating the frequency, regularity and proximity of the plaintiff’s asbestos exposure.

In Whelan, the plaintiff alleged that his work as a plumber and auto mechanic on boilers, valves, steam traps and brake drums exposed him to asbestos in products manufactured by various defendants. Plaintiff installed and worked with some original products manufactured by some of the defendants, but testified that he primarily encountered asbestos in cleaning, repairing and replacing component parts used in the products. He was not able to identify the manufacturers of the asbestos replacement parts. The trial court granted summary judgment because plaintiff did not show that he was exposed to friable asbestos on a regular and frequent basis that was sold, manufactured or distributed by the original equipment defendants. The court found that these defendants were not liable for asbestos-containing replacement parts that they did not manufacture or place into the stream of commerce.

On appeal, plaintiff argued that the defendants were strictly liable for their failure to warn of the “asbestos-related hazards of their products, inclusive of any component parts, including the hazards associated with routine maintenance and replacement, regardless of whether defendants manufactured or supplied the asbestos-containing hazardous components or replacement parts.”  Defendants argued that their liability was limited to injurious exposure from a defect in their own products.

The appellate court held that liability should extend to replacement and altered component parts where defendants’ products were originally marketed to contain asbestos-containing component parts. The holding was consistent with the broadened duty to warn recognized in Hughes v. A.W. Chesterton Co., 89 A.3d 179 (N.J. App. Div. 2014). Hughes had extended the duty to warn to workers who were exposed to asbestos in component parts as part of regular maintenance, but found the evidence of medical causation lacking. The court held that the plaintiff was still required to prove he was injuriously exposed to the specific defendant’s asbestos-containing product, separate and apart from exposures to asbestos in the replacement parts supplied by others.

On the causation point, Whelan parts ways with Hughes. The Appellate Division found that the original equipment manufacturer could be held responsible for not only the plaintiff’s exposure to asbestos from the product as shipped, but also the later exposures to asbestos arising from the replacement parts, even if those parts were supplied by third parties. “A product that contained asbestos when it was supplied by the manufacturer, with no warning as to the dangers posed by the asbestos-containing component, and that contained asbestos when encountered by a worker years later, remains in substantially the same defective condition, whether or not its original asbestos has been replaced with other asbestos.” Based on this expanded view of “the product,” and the foreseeability when the product was placed into the marketplace that asbestos-containing parts would be replaced with similar asbestos-containing parts, it was appropriate to include such replacement part exposures in the causation equation against the original manufacturer.

The court was satisfied that this new standard did not offend basic principles of fairness and public policy. It also noted that though there is no clear majority rule from other jurisdictions on this point, the recent trend is “skewed towards the imposition of liability on manufacturers even where the worker’s exposure was to replacement parts, where the original product was manufactured with asbestos-containing parts.”

Finally, the court acknowledged that a plaintiff in an asbestos failure-to-warn case must continue to carry the difficult burden of demonstrating medical causation through exposure to the product, albeit now “including all necessary component or replacement parts.” “If the product did not contain original asbestos component parts and did not require replacement asbestos parts, or plaintiff cannot demonstrate he or she used asbestos-containing replacement parts, the manufacturer is absolved of its responsibility to warn.”

Whelan significantly enlarges the liability burden for manufacturers of asbestos-containing products by broadening the causation standard to complement the broader duty to warn recognized in Hughes.

Note that the United States Supreme Court is scheduled to weigh in on the bare metal defense under maritime law in the coming term. Whether its pronouncement will have any impact on the future direction of New Jersey law on the subject remains to be seen.