X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Bulk suppliers of raw materials and component materials that are sued for failure to warn often urge that they had no duty to warn because of a “doctrine” variously described as the “bulk supplier defense,” the “sophisticated purchaser/ user defense” or the “raw material/component supplier defense.” These various formulations describe a basic rule that a seller of bulk materials should not be required to warn end users of risks associated with using the materials when the intermediate purchaser should have known of those risks and warned the end user. The issue often arises when industrial employees bring personal injury claims against bulk suppliers that sold materials to the plaintiffs’ employer, which often is insulated from liability by a workers’ compensation statute. Although the basic rule may be described simply, its application in practice cannot. Courts diverge in what burdens they impose on bulk suppliers in asserting the doctrine, as well as the factors they examine in doing so. Varying the burdens and factors considered has real-world consequences for bulk suppliers. If the doctrine is viewed as a “defense”-rather than a general rule of nonliability for certain categories of product suppliers-it becomes much more difficult for bulk suppliers to obtain summary judgment and thereby avoid trial. Similarly, when the factors a court applies are not generalized to the industry involved-but instead focus on facts about the particular litigants at issue- fact issues often are held to preclude summary judgment. Three 2004 cases illustrate differing approaches Last year, three state supreme courts issued important opinions applying the bulk supplier doctrine in silica litigation. They highlight the differences in how courts approach the bulk supplier issue. In Haase v. Badger Mining Corp., 682 N.W.2d 389 (Wis. 2004), a foundry worker with silicosis brought a strict liability claim against the company that supplied sand to his employer. When the sand left the defendant, experts testified, it could not cause silicosis because the granules were too large to be inhaled. The employer used the sand, which is more than 99% pure silica, by mixing it with other ingredients and pressing it into molds in which molten iron was poured. The sand surrounding a casting often was reused, and through this and other processes the silica granules fractured into sizes capable of being inhaled. At the end of the plaintiff’s case at trial, the trial court dismissed the case for insufficient evidence. The trial court applied � 5 of the Restatement (Third) of Torts, which adopts a general rule of nonliability (with exceptions) for sellers of raw materials that are incorporated into finished goods. In the comments to � 5, the drafters explained that “a basic raw material such as sand, gravel, or kerosene cannot be defectively designed” and that inappropriate decisions on their use “are not attributable to the supplier of the raw materials but rather to the fabricator that puts them to improper use.” Id., comment c. The drafters indicated that the “same considerations apply to failure-to-warn claims.” Id. The Wisconsin Supreme Court held that � 5 was inapplicable because the sand was not incorporated into another product; sand was used to mold iron, but was not incorporated into it. 682 N.W.2d at 394. But the high court affirmed the trial court’s dismissal on a different ground: namely, that the product (sand) was substantially changed in the foundry process before it injured the plaintiff. The plaintiff argued that this change-the fracture of sand into respirable particles-was foreseeable to the sand supplier. The Haase court rejected this argument, noting that foreseeability is not an element in strict liability. The neighboring Minnesota Supreme Court analyzed a foundry worker’s silicosis claim very differently in Gray v. Badger Mining Corp., 676 N.W.2d 268 (Minn. 2004). There, foreseeability and the parties’ actual knowledge were key to the analysis. In Gray, the trial court had denied the defendant’s summary judgment motion, which argued that the defendant had no duty to warn the plaintiff of the dangers of silica dust because the plaintiff’s employer was a sophisticated purchaser of sand, which the defendant supplied in bulk. The Minnesota Supreme Court affirmed. It recognized that when the foundry knocked the mold off of the casting, “the sand is pulverized to small sub-micron sized particles of dust.” Id. at 271. Yet it focused on the bulk supplier’s knowledge of the hazards of foundry processes, and its knowledge that disposable respirators were “ineffective to protect workers against the inhalation of sub-micron sized particles.” Id. The bulk supplier had warned about respiratory illness and carcinogenicity in its material data safety sheet, and urged employers to “use [National Institute for Occupational Safety and Health] or [Mine Safety and Health Administration] approved dust respirators.” But that warning was inadequate, the plaintiff argued, because disposable respirators were among such “approved” respirators. The bulk supplier argued that the employer’s sophistication relieved it of any duty to warn. The foundry received occupational health information from government agencies and industry bodies like the American Foundry Association. It had installed a dust-collection system and monitored air quality. It had given respirators to employees since the 1960s and required employees to have yearly chest X-rays since the 1950s. The Minnesota Supreme Court rejected the defendant’s arguments. It refused to apply the learned intermediary defense to the employer/employee relationship. And it refused to apply what it called the “sophisticated intermediary” defense, observing that to be entitled to this defense, the bulk supplier must have provided an adequate warning to the intermediary. The court also focused on the respective sophistication of the supplier and the employer, holding that there could be no summary judgment absent evidence that the employer’s knowledge was “equal” to the bulk supplier’s-not just generally, but on the specific issue of whether disposable respirators were effective. As in Haase, the Gray court held that � 5 of the Restatement (Third) did not apply because “the sand is not used as a component of a finished product, and it is the sand-not the finished product-that is dangerous to foundry workers.” Id. at 281. But Gray went further, stating in dictum that when � 5 applies, the bulk supplier “still must provide an adequate warning to the intermediate purchaser” and has “a duty to relay [its superior knowledge] to that purchaser.” Id. But the Texas Supreme Court reached a different conclusion in Humble Sand & Gravel Inc. v. Gomez, 146 S.W.3d 170 (Texas 2004). The court held that when the risks are commonly known by employers in the industry or the requested warning would not have prevented the harm, then no duty to warn should be imposed on the bulk supplier. See also Bergfeld v. Unimin Corp., 319 F.3d 350, 353-54 (8th Cir. 2003). The Humble Sand court refused to focus individually on the knowledge of the supplier and the industrial employer, as the Gray court did. It said that “[t]he idea that product suppliers must investigate every customer’s awareness of dangers and tailor a warning to fit each one is certainly impractical . . . and radical.” 146 S.W.3d at 196. Applying comment n to � 388 of the Restatement (Second) of Torts, the court noted: “When there are multiple suppliers and multiple intermediaries, all typical in important respects, comment n cannot be read to prescribe an analysis of legal duty supplier by supplier or intermediary by intermediary, with the result that some suppliers are obliged to warn some end users but not others, while other suppliers need provide no warning at all . . . .[I]n such an industry, the issue to be determined . . . [is] whether flint suppliers had a duty to warn abrasive blasters generally, given the nature of the industry.” Id. at 189. Court said suppliers had no duty to warn employers The Humble Sand court held that flint suppliers had no duty to warn abrasive blasting companies about the health risks of silica or the need to wear air-fed hoods (rather than disposable respirators) “because that information had been commonly known throughout the industry.” Id. at 184. The court remanded the case for further proceedings, however, because the record did not contain enough facts to determine whether bulk suppliers could have provided warnings that actually would have reached workers in the abrasive blasting industry. Of the three state supreme court silica decisions, Humble Sand contains the best discussion of what is required to decide whether to impose a duty to warn. Whether a duty exists, of course, is a matter of law, but some of the factors necessary to this question are grounded in facts. As the Texas court recognized, however, it is unusual that the resolution of the duty question relies on facts that cannot be determined as a matter of law. And, as the court observed, it matters where the burden of establishing the duty is placed. Typically, the plaintiff must establish the existence of a duty. In Humble Sand, the court chose to place the burden on the defendant to demonstrate that a duty to warn did not exist. Some would argue that this departure from the norm is contrary to the principles underlying the commentary to � 5 of the Restatement (Third), which places responsibility for inappropriate use of raw materials with the purchaser. There remains no consensus on how the bulk supplier doctrine should be applied to raw materials such as silica. The rules adopted by some courts are certain to proliferate even more warning labels on basic materials. See Leigh Jones, “Warning: It’s now a fact of life/Disclaimers aim to prevent suits against even basic materials,” NLJ, Sept. 6, 2004, at 1. The better analysis, however, focuses on industries generally, rather than specific facts regarding individual suppliers and purchasers. J. Russell Jackson is a partner in the complex mass torts group at New York-based Skadden, Arps, Slate, Meagher & Flom.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.