Air & Liquid Sys. Corp. v. Devries

• Court: U.S. Supreme Court
• Writing for the Court: Justice KAVANAUGH delivered the opinion of the Court.
• Citation: Air & Liquid Sys. Corp. v. Devries, 139 S.Ct. 986, 203 L.Ed.2d 373 (2019)
• Decision Date: 19 March 2019
• Docket Number: No. 17-1104,17-1104
• Parties: AIR AND LIQUID SYSTEMS CORP., et al., Petitioners v. Roberta G. DEVRIES, Individually and as Administratrix of the Estate of John B. DeVries, Deceased, et al.

139 S.Ct. 986

203 L.Ed.2d 373

AIR AND LIQUID SYSTEMS CORP., et al., Petitioners

v.Roberta G. DEVRIES, Individually and as Administratrix of the Estate of John B. DeVries, Deceased, et al.

No. 17-1104

Supreme Court of the United States.

Argued October 10, 2018

Decided March 19, 2019

Shay Dvoretzky, Washington, DC, for the petitioners.

Thomas C. Goldstein, Bethesda, MD, for the respondents.

Benjamin M. Flowers, Jones Day, Columbus, OH, Shay Dvoretzky, Jeffrey R. Johnson, Vivek Suri, Jones Day, Washington, DC, Christopher G. Conley, Evert Weathersby, Houff, Bogart, GA, for petitioner CBS Corporation.

Brady L. Green, Wilbraham, Lawler & Buba, Philadelphia, PA, for petitioner Air & Liquid Systems Corp.

Christopher J. Keale, Afigo I. Okpewho-Fadahunsi, Tanenbaum Keale LLP, Newark, NJ, for petitioner Foster Wheeler LLC.

John J. Hare, Marshall Dennehey, Warner Coleman & Goggin, Philadelphia, PA, for petitioner Ingersoll-Rand Company.

Timothy E. Kapshandy, John A. Heller, Sidley Austin LLP, Chicago, IL, Carter G. Phillips, Counsel of Record, Paul J. Zidlicky, Tobias S. Loss-Eaton, Sidley Austin LLP, Washington, DC, for respondent General Electric Co.

Denyse F. Clancy, Kazan, McClain, Satterley, & Greenwood, Oakland, CA, Richard P. Myers, Robert E. Paul, Alan I. Reich, Patrick J. Myers, Paul, Reich & Myers, P.C., Philadelphia, PA, Jonathan Ruckdeschel, The Ruckdeschel Law Firm, LLC, Ellicott City, MD, William W.C. Harty, Patten, Wornom, Hatten & Diamonstein, Newport News, VA, for respondents.

Justice KAVANAUGH delivered the opinion of the Court.

In maritime tort cases, we act as a common-law court, subject to any controlling statutes enacted by Congress. See Exxon Shipping Co. v. Baker , 554 U.S. 471, 507–508, 128 S.Ct. 2605, 171 L.Ed.2d 570 (2008). This maritime tort case raises a question about the scope of a manufacturer’s duty to warn. The manufacturers here produced equipment such as pumps, blowers, and turbines for three Navy ships. The equipment required asbestos insulation or asbestos parts in order to function as intended. When used on the ships, the equipment released asbestos fibers into the air. Two Navy veterans who were exposed to asbestos on the ships developed cancer and later died. The veterans’ families sued the equipment manufacturers, claiming that the manufacturers were negligent in failing to warn of the dangers of asbestos.

The plaintiffs contend that a manufacturer has a duty to warn when the manufacturer’s product requires incorporation of a part (here, asbestos) that the manufacturer knows is likely to make the integrated product dangerous for its intended uses. The manufacturers respond that they had no duty to warn because they did not themselves incorporate the asbestos into their equipment; rather, the Navy added the asbestos to the equipment after the equipment was already on board the ships.

We agree with the plaintiffs. In the maritime tort context, a product manufacturer has a duty to warn when (i) its product requires incorporation of a part, (ii) the manufacturer knows or has reason to know that the integrated product is likely to be dangerous for its intended uses, and (iii) the manufacturer has no reason to believe that the product’s users will realize that danger. The District Court did not apply that test when granting summary judgment to the defendant manufacturers. Although we do not agree with all of the reasoning of the U. S. Court of Appeals for the Third Circuit, we affirm its judgment requiring the District Court to reconsider its prior grants of summary judgment to the defendant manufacturers.

I

Kenneth McAfee served in the U. S. Navy for more than 20 years. As relevant here, McAfee worked on the U. S. S. Wanamassa from 1977 to 1980 and then on the U. S. S. Commodore from 1982 to 1986. John DeVries served in the U. S. Navy from 1957 to 1960. He worked on the U. S. S. Turner .

Those ships were outfitted with equipment such as pumps, blowers, and turbines. That equipment required asbestos insulation or asbestos parts in order to function as intended. When used as intended, that equipment can cause the release of asbestos fibers into the air. If inhaled or ingested, those fibers may cause various illnesses.

Five businesses—Air and Liquid Systems, CBS, Foster Wheeler, Ingersoll Rand, and General Electric—produced some of the equipment that was used on the ships. Al-though the equipment required asbestos insulation or asbestos parts in order to function as intended, those businesses did not always incorporate the asbestos into their products. Instead, the businesses delivered much of the equipment to the Navy without asbestos. The equipment was delivered in a condition known as "bare-metal." In those situations, the Navy later added the asbestos to the equipment.¹

McAfee and DeVries allege that their exposure to the asbestos caused them to develop cancer. They and their wives sued the equipment manufacturers in Pennsylvania state court. (McAfee and DeVries later died during the course of the ongoing litigation.) The plaintiffs did not sue the Navy because they apparently believed the Navy was immune. See Feres v. United States , 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152 (1950). The plaintiffs also could not recover much from the manufacturers of the asbestos insulation and asbestos parts because those manufacturers had gone bankrupt. As to the manufacturers of the equipment—such as the pumps, blowers, and turbines—the plaintiffs claimed that those manufacturers negligently failed to warn them of the dangers of asbestos in the integrated products. If the manufacturers had provided warnings, the workers on the ships presumably could have worn respiratory masks and thereby avoided the danger.

Invoking federal maritime jurisdiction, the manufacturers removed the cases to federal court. The manufacturers then moved for summary judgment on the ground that manufacturers should not be liable for harms caused by later-added third-party parts. That defense is known as the "bare-metal defense."

The District Court granted the manufacturers’ motions for summary judgment. The U. S. Court of Appeals for the Third Circuit vacated and remanded. In re Asbestos Prods. Liability Litigation , 873 F.3d 232, 241 (2017). The Third Circuit held that "a manufacturer of a bare-metal product may be held liable for a plaintiff’s injuries suffered from later-added asbestos-containing materials" if the manufacturer could foresee that the product would be used with the later-added asbestos-containing materials. Id. , at 240.

We granted certiorari to resolve a disagreement among the Courts of Appeals about the validity of the bare-metal defense under maritime law. 584 U. S. ––––, 138 S.Ct. 1990, 201 L.Ed.2d 246 (2018). Compare 873 F.3d 232 (case below), with Lindstrom v. A-C Prod. Liability Trust , 424 F.3d 488 (CA6 2005).

II

Article III of the Constitution grants the federal courts jurisdiction over maritime cases. Under 28 U. S. C. § 1333, the federal courts have "original jurisdiction, exclusive of the courts of the States, of ... [a]ny civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled."

When a federal court decides a maritime case, it acts as a federal "common law court," much as state courts do in state common-law cases. Exxon Shipping Co. , 554 U.S. at 507, 128 S.Ct. 2605. Subject to direction from Congress, the federal courts fashion federal maritime law. See id. , at 508, n. 21, 128 S.Ct. 2605 ; Miles v. Apex Marine Corp. , 498 U.S. 19, 27, 111 S.Ct. 317, 112 L.Ed.2d 275 (1990) ; United States v. Reliable Transfer Co. , 421 U.S. 397, 409, 95 S.Ct. 1708, 44 L.Ed.2d 251 (1975) ; Detroit Trust Co. v. The Thomas Barlum , 293 U.S. 21, 42–44, 55 S.Ct. 31, 79 L.Ed. 176 (1934). In formulating federal maritime law, the federal courts may examine, among other sources, judicial opinions, legislation, treatises, and scholarly writings. See Exxon Co., U. S. A. v. Sofec, Inc. , 517 U.S. 830, 839, 116 S.Ct. 1813, 135 L.Ed.2d 113 (1996) ; East River S. S. Corp. v. Transamerica Delaval Inc. , 476 U.S. 858, 864, 106 S.Ct. 2295, 90 L.Ed.2d 865 (1986).

This is a maritime tort case. The plaintiffs allege that the defendant equipment manufacturers were negligent in failing to warn about the dangers of asbestos. "The general maritime law has recognized the tort of negligence for more than a century ...." Norfolk Shipbuilding & Drydock Corp. v. Garris , 532 U.S. 811, 820, 121 S.Ct. 1927, 150 L.Ed.2d 34 (2001) ; see also Kermarec v. Compagnie Generale Transatlantique , 358 U.S. 625, 631–632, 79 S.Ct. 406, 3 L.Ed.2d 550 (1959). Maritime law has likewise recognized common-law principles of products liability for decades. See East River S. S. Corp. , 476 U.S. at 865, 106 S.Ct. 2295.

In this negligence case, we must decide whether a manufacturer has a duty to warn when the manufacturer’s product requires later incorporation of a dangerous part—here, asbestos—in order for the integrated product to function as intended.

We start with basic tort-law principles. Tort law imposes "a duty to exercise reasonable care" on those whose conduct presents a risk of harm to others. 1 Restatement (Third) of Torts: Liability for Physical and Emotional Harm § 7, p. 77 (2005). For the manufacturer of a product, the general duty of care includes a duty to warn when the manufacturer "knows or has reason to know" that its product "is or is likely to be dangerous for the use for which it is supplied" and the manufacturer "has no reason to believe" that the product’s users will realize that danger. 2 Restatement (Second) of Torts § 388, p. 301 (1963–1964).

In tort cases, the federal and state courts have not reached consensus on how to apply that general tort-law "duty to warn" principle when the manufacturer’s product requires later incorporation of a dangerous part in order for the integrated product to function as intended. Three approaches have emerged.

The first approach is the...