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Stewart v. Union Carbide Corp.

November 16, 2010


APPEAL from a judgment of the Superior Court of Los Angeles County. Alan S. Rosenfield, Judge. Affirmed. (Los Angeles County Super. Ct. No. BC384224)

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


Defendant and appellant Union Carbide Corporation appeals from the judgment entered against it and in favor of plaintiffs and respondents Larry Stewart and Janet Stewart, on the Stewarts' complaint. We affirm.

Factual and Procedural Summary

Larry Stewart worked as a plumber, or plumber's apprentice, from 1968 until his diagnosis with mesothelioma in 2007. After his diagnosis, he sued Union Carbide (and others, who settled prior to trial) for fraud, negligence, and strict products liability on failure to warn and design defect theories. Janet Stewart, Larry Stewart's wife, sued for loss of consortium. Plaintiffs sought punitive damages.

At trial, Stewart testified that throughout his career, he worked on large commercial and residential construction projects. He worked near drywallers on "just about every job." Drywallers use joint compound, and plaintiffs presented evidence that during relevant time periods, joint compound contained asbestos which was released when the walls were sanded. Stewart testified that on most of the jobs he worked on, the drywallers used joint compound manufactured by a company called Hamilton Materials, though USG joint compound was used some instances. Plaintiffs presented evidence that USG and Hamilton Materials obtained asbestos from Union Carbide, which mined chrysotile asbestos in Coalinga, California and sold that asbestos under the brand name Calidria.

Stewart described his exposure to asbestos from joint compound. Drywallers followed the plumbers, putting up walls as soon as the plumbers finished. The drywallers put up drywall, taped the joints, put joint compound over the tape and over the screws or nails, then sanded. Sanding created a fine dust, like talcum powder. The dust formed a white cloud which got into hair and clothes and filled not just the room the drywallers were working in, but adjacent rooms. Laborers would come through to sweep, stirring the dust into the air and creating a dust storm. Once the sanding started, the job was "a total mess," with "dust everywhere." There was no way to avoid breathing this dust.

Stewart also testified that although he saw many boxes of joint compound during his career, he never saw a box with any warning about the hazards of asbestos, or even a warning that the compound contained asbestos, something he did not know. He never received any OSHA warning, or any other warning, on that subject. Safety meetings were dedicated to such things as the hazards of extension cords and falling objects. Stewart knew that construction sites would be dirty, but never knew that there was anything in the dust created by sanded joint compound that would be hazardous to his health. To the contrary, he assumed that if a product was available on the market, it was safe to use.

Stewart testified concerning the mentally and physically debilitating effects of his disease and of his treatment, which had included six rounds of chemotherapy, with three more rounds of experimental treatment recommended. He described the effect of his disease on his life and on his family.

Through expert witnesses, plaintiffs presented evidence that Larry Stewart's disease was caused by asbestos, that medical tests showed that there were asbestos fibers in his lungs, that such fibers are not found in the general population, and that he had had a significant exposure to asbestos. Based on studies, plaintiffs' expert opined that a person exposed to dust created when asbestos-containing joint compound was sanded was at risk of mesothelioma, even if the person was a bystander.

Plaintiff also presented evidence on Union Carbide's knowledge of the dangers of asbestos, economic damages and other issues.

At the close of evidence, the trial court directed a verdict for Union Carbide on the cause of action for fraud. The case went to the jury on causes of action for negligence and strict products liability on both failure to warn and design defect/consumer expectations theories. The jury found for plaintiffs on all those causes of action. The jury was asked to allocate fault between a large number of entities, described in the briefs herein as suppliers of asbestos-containing materials, and found that Union Carbide accounted for 85 percent of the fault, and Hamilton Materials for 15 percent.

The jury awarded Larry Stewart $2.2 million for past and future economic damages, and $500,000 for past and future non-economic damages, and awarded Janet Stewart past non-economic damages of $250,000 and future non-economic damages of $250,000. For purposes of punitive damages, the jury also found that Union Carbide had acted with malice, oppression, or fraud. After a trial on punitive damages, the jury awarded $6 million in punitive damages.

After applying $1,782,375 in credits based on the pre-verdict settlements with other defendants and making appropriate calculations based on Union Carbide's 85 percent share of fault,*fn1 the court entered judgment in favor of Larry Stewart in the amounts of $417,625 in economic damages and $425,000 in non-economic damages and $6 million in punitive damages, and in favor of Janet Stewart in the amount of $425,000 in non-economic damages. Union Carbide's post-trial motions for judgment notwithstanding the verdict and for a new trial were denied.


A. The "Sophisticated Purchaser Defense" to Failure to Warn

Union Carbide asked the court to instruct the jury on what it calls a sophisticated purchaser defense, and on appeal argues that the court wrongly refused the instruction. There is some controversy concerning the instructions actually presented to the court,*fn2 but in general, Union Carbide asked to have the jury instructed that "where the risk of using a hazardous product is already known, or should be known, by the purchaser of that product, the product supplier has no duty to warn of the product's potential hazards," that a bulk supplier's or raw materials supplier's duty to warn "is measured by what is generally known or should be known to purchasers of the raw product, rather than by the individual plaintiff's subjective knowledge," and that "the sale of a raw material to a sophisticated intermediary purchaser who knew or should have known of the risks of that raw material cannot be the legal cause of any harm the raw material may cause."

Union Carbide argues that such an instruction falls under the rationale of Johnson v. American Standard, Inc. (2008) 43 Cal.4th 56 and is suggested by that case. It is not. Johnson's sole reference to a sophisticated purchaser is in a discussion of treatises and out-of-state cases. (Id. at p. 65.) Nothing in the discussion suggests the rule Union Carbide seeks.

In Johnson, the plaintiff was injured while repairing an air conditioning unit which had no warning of a dangerous condition which could arise during repair. However, the plaintiff was a professional, EPA certified, air conditioning repair technician, who, the court concluded, could reasonably have been expected to know of just that danger. Johnson reiterated the rule that "manufacturers have a duty to warn consumers about the hazards inherent in their products" (id. at p. 64, italics added), but recognized an exception to that rule, holding that "sophisticated users need not be warned about dangers of which they are already aware or should be aware." (Id. at p. 65, italics added.) In such circumstances, the court held, failure to warn was not the legal cause of the harm. Instead, "the user's knowledge of the dangers is the equivalent of prior notice." (Ibid.) The court held that "individuals who represent that they are trained or are members of a sophisticated group of users are saying to the world that they possess the level of knowledge and skill associated with that class. If they do not actually possess that knowledge and skill, that fact should not give rise to liability on the part of the manufacturer." (Id. at p. 71.)

Johnson did not impute an intermediary's knowledge to the plaintiff, or charge him with any knowledge except that which had been made available to him through his training and which, by reason of his profession and certification, he should have had. In contrast, Union Carbide's proposed instruction is not based on the theory that Larry Stewart had the opportunity to acquire any knowledge of the dangers of asbestos, let alone the obligation to do so. Instead, it contends that its customers, Hamilton and USG, knew or should have known (from public sources) of the dangers of asbestos, and that its duty to warn Stewart is measured by the knowledge Hamilton and USG should have had. It is apparent that such a theory has nothing to do with Johnson.

Actually, the proposed defense is an extension not of Johnson, but of the bulk supplier/component parts doctrine. Under that doctrine, the manufacturer of a product component or raw material is not liable for injuries caused by the finished product unless it appears that the component itself was defective when it left the manufacturer. (Tellez-Cordova v. Campbell-Hausfeld/Scott Fetzger Co. (2004) 129 Cal.App.4th 577, 581.) Asbestos suppliers have sought the protection of that rule, but it has not been afforded to them, because raw asbestos is a defective product. (Jenkins v. T & N PLC (1996) 45 Cal.App.4th 1224; Garza v. Asbestos Corp., Ltd. (2008) 161 Cal.App.4th 651; Arena v. Owens-Corning Fiberglas Corp. (1998) 63 Cal.App.4th 1178, 1188.) Union Carbide does not address these cases with any specificity, but only refers to plaintiffs' reliance on cases which pre-date Johnson. Union Carbide argues that after that case, even a bulk supplier's duty to warn ...

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