Shell Oil Co. v. Harrison, s. AC-89
| Decision Date | 15 December 1982 |
| Docket Number | Nos. AC-89,AH-170,s. AC-89 |
| Citation | 425 So.2d 67 |
| Parties | SHELL OIL COMPANY, a foreign corporation, Appellant, v. Calvin Richard HARRISON and Cindy Baldwin Harrison, Appellees. |
| Court | Florida District Court of Appeals |
Charles W. Ehrhardt, Tallahassee, Ernest W. Welch of Welch & Munroe, P.A., Tallahassee, and Burt Ballanfant and L. Chris Butler, Litigation Dept., Houston, Tex., for appellant.
C. Douglas Brown of Isler, Brown, Smoak, Harrison & Nabors, Panama City, for appellees.
This case involves a suit by the Harrisons alleging negligence, strict liability, and breach of an implied warranty by Shell Oil Company and Kerr-McGee Chemical Corporation in manufacturing and marketing a chemical product, "Fasco Nemagon 70EC." The jury returned a detailed special verdict for compensatory and punitive damages against each defendant. In apportioning the responsibility for injury or damage, the jury found Shell responsible for 35%, Kerr-McGee for 60%, and plaintiff Calvin Richard Harrison for 5% of the total compensatory damages of $400,000. Punitive damages of $135,000 were also assessed against each defendant. Thereafter, Shell and Kerr-McGee appealed, but Kerr-McGee later satisfied the judgment against it and withdrew its appeal.
Shell presents numerous points on appeal. We address only the dispositive issue of the duties of a bulk manufacturer or supplier of chemicals to warn manufacturing formulators, retailers, and ultimate users.
Shell was the patent owner, bulk manufacturer, and bulk supplier of a chemical product known as 1, 2-Dibromo-3-Cholopropane (DBCP) which was commonly used as a soil fumigant for many years. Shell marketed DBCP in bulk thirty-gallon steel containers under the trade name Nemagon. As a part of its marketing agreements, Shell furnished Kerr-McGee, and other customers, with a Specimen Label Book and a Shell Formulators Manual. In turn, Kerr-McGee reformulated Nemagon and marketed it for various applications. The particular product involved, containing 70% DBCP and 30% inert ingredients, was packaged in one-gallon glass jugs under the Kerr-McGee trade name Fasco Nemagon 70EC. The label stated that the product was manufactured by Kerr-McGee, but also stated that Nemagon was a Shell registered trademark. Kerr-McGee marketed Fasco Nemagon 70EC through retail dealers in Florida and other states. Among other applications, the product was used against nematodes, microscopic root worms which attack lawns.
During the 1960's and 1970's, concern arose over the possible harmful effects of manufacturing and using Nemagon and, of particular interest here, its use or storage in or around the home. In 1972, as required under federal law, Kerr-McGee submitted a proposed label for a Nemagon formulation to the Environmental Protection Agency (EPA) for approval. The EPA questioned the adequacy of the label, and a triangular exchange of letters ensued between the EPA, Kerr-McGee, and Shell concerning the use and storage of Nemagon products in or around the home. In this exchange, the EPA pointed out that products containing more than 20% Nemagon should not be used in or around the home, that containers of less than one gallon were considered to be for the home market, and that Shell placed labels warning against use or storage in or around the home on five-gallon containers of Nemagon products containing more than 20% Nemagon. Thereafter, on its thirty-gallon containers, the Shell label included the warning "not for use or storage in or around the home."
The concern over the possible harmful effects of Nemagon deepened during the 1970's and, on 24 August 1977, Shell informed Kerr-McGee and other Shell customers by letter of recent developments concerning Nemagon. This letter stated that Shell had suspended manufacture and distribution of Nemagon, and recommended that further sales, reformulation, and shipment of the product be suspended and that Nemagon not be used pending further information. The letter also stated that it was imperative that employees and customers be notified of this information and of Shell's recommendations. In a press release the same week, Shell announced its previous actions and stated that it would ask its distributors to return their Nemagon stock and to assist in the return of products in the hands of dealers and growers. By follow-up letter dated 31 August 1977, Shell requested that Kerr-McGee notify its employees and customers as soon as possible of this new information, that Kerr-McGee return field inventories of Nemagon to Shell, and that Kerr-McGee contact its customers, including dealers and growers, to urge that they return stock on hand.
Charles Baldwin, appellees' father and father-in-law, purchased three one-gallon glass jars of Fasco Nemagon 70EC from a Panama City lawn and garden shop in ...
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