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Oxford v. Foster Wheeler LLC

September 9, 2009


(Super. Ct. of the City & County of San Francisco No. 440328), Honorable Tomar Mason.

The opinion of the court was delivered by: Graham, J.


Defendant Foster Wheeler LLC appeals from the judgment entered against it after a jury trial. Defendant contends the trial court erred in refusing to enter judgment in its favor based on the jury's positive finding on the federal ―government contractor defense.‖ Defendant also claims the court erred in refusing to instruct on the ―sophisticated user‖ doctrine, and that the jury's finding of negligence is irreconcilably inconsistent with its findings that defendant's product was not defective. Because the jury rendered inconsistent verdicts, we will reverse and remand for a new trial.


I. The Complaint

On March 22, 2006, plaintiff Judy Oxford, individually and as successor in interest to Calvin Oxford (Oxford), and Chris Oxford and Jennifer Odegaard as legal heirs of Oxford (collectively referred to as plaintiffs), filed their first amended complaint against defendant Foster Wheeler and several other defendants. The complaint alleged that Oxford was exposed to asbestos between 1963 and 1967 while assigned to the boiler repair shop of the U.S.S. Klondike-a United States Navy vessel that functioned as a repair ship for other Navy warships -- and while working at various shipyards including the Long Beach Naval Shipyard in Long Beach, California. In 2005, Oxford was diagnosed with mesothelioma, a cancer of the lining of the lung. He died that same year. The complaint states causes of action against defendant for negligence, products liability, false representation, and prays for damages including loss of consortium, and wrongful death.*fn1

On May 17, 2006, defendant filed its answer to the first amended complaint. As an affirmative defense, defendant alleged that its asbestos-containing products had been manufactured in accordance with contract specifications imposed by the United States government.

II. Evidence Presented at Trial

During World War II, defendant manufactured D-style boilers that were installed in ships belonging to the United States Navy. The boilers included asbestos materials within the insulation, hand holes, manholes, and flanges that connect valves and steam outlets to the boiler, as well as in the part of the boiler system known as the economizer. The steel enclosure for the boiler included one-inch asbestos-containing high-temperature insulating block inside the furnace walls, tube banks, and roof.

The Navy provided defendant with performance and mechanical specifications that were used to design the boilers, including specifications with respect to steam quantity, steam pressure, and steam temperatures. Defendant incorporated those specifications into a design intended to meet these specific performance requirements. The Navy specifications required that asbestos be used in certain parts of the boilers. Many of these World War II ships were overhauled during the 1960's for use during the Vietnam War.

The evidence presented showed that by 1930 medicine and science had established that asbestosis, an incurable scarring disease of the lung, was associated with exposures to asbestos in the workplace. In 1946, the American Conference of Governmental Industrial Hygienists (ACGIH) first published its recommended threshold limit value for asbestos. The limit was set at five million particles per cubic foot. This limit was considered protective against asbestosis. It was not intended to be a guideline protective against cancer. By 1960, there were suggestions of a link between asbestos exposure in the workplace, including exposure in the insulation industry, and cancer. A study published in 1972 demonstrated an association between amosite asbestos exposure and lung cancers, including mesothelioma. The ACGIH did not modify its recommended threshold value until 1974.

The Navy was aware of the health hazards associated with asbestos as far back as the 1930's. During the 1940's, steps were taken to minimize worker exposure to asbestos and other particulates during the construction of naval vessels. In 1946, researchers concluded that pipe insulation workers were not being exposed to dangerous levels of asbestos in Naval shipyards.

The Navy first became aware of an incidence of mesothelioma in 1967. An industrial hygiene expert witness called by plaintiffs testified that the first time he saw warnings on a Navy ship regarding asbestos-containing thermal pipe insulation was in the early 1980's. A witness who had worked with Navy boilers during the 1960's testified that he never saw any warnings from a boiler manufacturer concerning the dangers of asbestos exposure. There was also testimony that in the 1960's defendant would not have known any more than the Navy did regarding the health risks posed by the use of asbestos-containing products. Workers without respiratory protection who were repairing and maintaining defendant's boilers on Navy vessels in the 1960's would have been exposed to hazardous levels of asbestos.

Instruction manuals prepared by defendant at the time the boilers were originally manufactured do not contain any warnings regarding asbestos exposure, though they do warn of other potential hazards. The manuals address how to operate, test, repair, and maintain the boilers. All such manuals were submitted to the Navy for approval and acceptance. Once they were submitted and approved, the manuals became Navy publications. An expert witness on Naval industrial hygiene testifying on behalf of defendant testified that the Navy did not intend for information on hazards other than those involved in the actual operation of the equipment to be included in instruction manuals. He also testified that the Navy has very specific requirements for Navy machinery instruction manuals.

While the boiler on the U.S.S. Klondike was not manufactured by defendant, Oxford's job included repairing and maintaining other warships' boilers, requiring him to remove, install, disturb, and handle asbestos-containing products. Some of those boilers were manufactured by defendant. The workers did not see any warnings associated with defendant's boilers regarding the dangers of working with asbestos-containing products, or advising that they should wear respiratory protection.

III. The Verdict

On January 4, 2008, the jury, using a special verdict form, found against plaintiffs on their products liability claims for design defect and failure to warn, but found in favor of plaintiffs on their claim for negligence. The verdict form did not ask the jury to specify the factual basis for its negligence finding. The jury also found that defendant had proved the three elements of the government contractor defense: (1) That the United States government approved reasonably precise specifications for use by defendant in manufacturing the boilers, (2) that the boilers conformed to the approved specifications, and (3) that defendant warned the government about the dangers of its product that were known to defendant but not to the government.*fn2 The jury proceeded to award damages and to apportion liability among the various responsible parties. The verdict form did not direct the jury to stop filling out the form once it made a positive finding on the affirmative defense.

After the verdict was rendered, defendant requested that judgment be entered in its favor, arguing the positive finding on the elements of the government contractor defense immunized it from liability. Plaintiffs contended below that judgment should be entered in their favor, in spite of the findings on the defense, because defendant had not demonstrated that ―the products in this case are, quote, military equipment, close quote.‖ The trial court found the affirmative defense did not foreclose judgment against defendant, reasoning that the defense verdict on the product liability claim for failure to warn did not subsume the jury's finding on negligent failure to warn, and that the government contractor defense does not apply to failure to warn claims. This appeal followed.


I. Standard of Review

Plaintiffs assert that we must review the trial court's decision to enter judgment in their favor under the abuse of discretion ...

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