Monthly Archives: May 2013

Utah Legislature Leaves Issue of Supplier Liability Unresolved

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A bill proposing to impose liability on U.S. distributors of goods manufactured in foreign countries has been sent for interim study by the Utah Legislature.

During the 2013 Utah Legislative Session, which concluded March 14, 2013, the Legislature considered HB161.  The bill was sponsored by Representative Mike McKell.  The original bill would have amended the Utah Product Liability Code, Utah Code 78B-6-708, to state: “For products, other than pharmaceuticals, that are manufactured outside of the United States, the first entity that sells or distributes the product within the United States is subject to the same liability as the product’s original manufacturer.”  The bill faced strong opposition and did not make it out of committee.  However, the Master Study Resolution (HJR20) now lists the bill as an a issue for interim study.  Accordingly, the issue is far from resolved.

 

Applicability of Utah Liability Reform Act Upheld in Latent Exposure Case

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On April 4, 2013, the Utah Court of Appeals upheld the trial court’s application of the Utah Liability Reform Act to apportion damages in a situation where defendants’ negligent acts and Plaintiff’s asbestos exposure occurred prior to the effective date of the Act, but the manifestation of injury and the complaint occurred after the effective date.

In this matter, Appellants argued that the Liability Reform Act (LRA) is not retroactive and that any statute eliminating joint and several liability may not be applied to injuries occurring prior to the effective date of the changing statute.  Appellants argued that the relationship of the parties is established at the time the injury occurs, not the time it is discovered, relying on the proposition that plaintiff was injured at time of her exposure to asbestos.  Appellants pushed for an order overturning the trial court’s application of the LRA and directing that the Comparative Negligence Act (CNA) be applied instead.

Appellees Georgia-Pacific LLC and Union Carbide Corporation challenged the argument on issues of timeliness and also argued that the Utah Supreme Court has repeatedly recognized that the governing substantive law is that which is in effect at the time a cause of action accrues.  A latent exposure cause of action accrues at the time of diagnosis or discovery of actual injury— not at time of exposure alone.  Moreover, Appellees argued, because plaintiff had asserted exposure over a forty-year period, if Appellant’s arguments are accepted, at least four different iterations of comparative/contributory fault would apply.

Oral arguments were heard in the case on January 17, 2013.

The Court of Appeals April 4, 2013 Opinion, citing Davidson Lumber Sales, Inc. v. Bonneville Inv., Inc., 794 P.2d 11 (Utah 1990) noted, “A tort cause of action accrues when it becomes remediable in the courts, that is, when all elements of a cause of action come into being.”  The Court ruled that the plaintiff in the underlying peritoneal mesothelioma case did not have an actionable claim until she was diagnosed.  Until then, development of her disease was only possibility in light of her exposure to asbestos.  Accordingly, the Court held, “because [the underlying plaintiff’s] cause of action did not accrue until her diagnosis in July 2007, long after the repeal of the CNA and enactment of the LRA, we affirm the trial court’s application of the LRA.”

Case is Micah Riggs on behalf of Decedent Vickie Warren v. Georgia-Pacific LLP, Hamilton Materials, and Union Carbide Corporation, 2013 UT App. 86  (Third Judicial District Court, District of Utah, Case No. 070911933).  Statute is Utah Liability Reform Act, Utah Code §78B-5-817 et seq.

 

Utah Court of Appeals Qualitatively Upholds Bulk Supplier Rule in Asbestos Case

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In the same case as above, on April 4, 2013 the Utah Court of Appeals upheld a jury verdict against a raw material supplier of asbestos and deemed the supplier was liable to the underlying Plaintiff under a failure to warn claim or design defect case, but strongly signaled that but for the procedural constraints of the appeal, the Court may have rendered a different decision.

In this matter, two days after the jury reached its verdict in favor of the plaintiff, the Utah Supreme Court adopted the raw materials provider rule set forth in the Third Restatement of Torts. Gudmunson v. Del Ozone, 2010 UT 33, 232 P.3d 1059.  Thereafter, Union Carbide filed a motion for judgment notwithstanding the verdict, which was denied.  At the appellate level, now Cross-Appellant Union Carbide argued that under the Third Restatement of Torts, a raw material supplier cannot be held liable for injuries to the end users of tape joint compound.  As argued, chrysotile asbestos is a raw material provided by Union Carbide to tape joint compound manufactures and, as such, cannot be deemed to be defectively designed.  Union Carbide also argued that, under the Restatement (Third) of Torts, a seller of a raw material has no duty to warn the end-user of a product that contains the raw material.

Cross-Appellee argued that the manufacturing, processing, labeling, and branding of the raw asbestos removes it from consideration as a “raw material.”  Cross-Appellee also argued that the component manufacturer law relied upon by Cross-Appellant was not adopted by the Utah Supreme Court and, therefore, is not applicable. Moreover, Cross-Appellee argued that the component part—the raw asbestos—was in and of itself defective and, as such, Union Carbide cannot escape liability.

Oral arguments were heard in the case on January 17, 2013.

The Court disagreed with Cross-Appellee’s argument that “dangerous equals defective” and determined that “regardless of its dangerousness, Union Carbide’s product could not be defectively designed because it is a raw, unadulterated material.”  Thus, the Court reduced the question to whether Union Carbide’s product was defective based on the adequacy of the warnings provided.  The Court, however, ruled that at the trial court level, the issue of which individuals Union Carbide owed a duty to warn and whether its warnings to the manufacturer satisfied that duty “were not developed or addressed at trial in such a way to permit our review, especially under JNOV framework.”  In an interesting turn, the Court stated, “Thus we find ourselves in the peculiar procedural position of reviewing a denial of a judgment notwithstanding the jury’s verdict, when the issue at hand, while persuasive at an abstract level, was not presented to the jury and therefore not a part of its verdict.”

Accordingly, the Court of Appeals felt constrained to uphold the verdict against Union Carbide, but the Opinion sets forth a variety of suggestions for jury instructions and post-verdict motions such that the Court essentially offered a roadmap for future raw materials cases.

Case is Micah Riggs on behalf of Decedent Vickie Warren v. Georgia-Pacific LLP, Hamilton Materials, and Union Carbide Corporation, 2013 UT App. 86  (Third Judicial District Court, District of Utah, Case No. 070911933).