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).