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Dealing a double blow to an asbestos distributor, the Pennsylvania Supreme Court has ruled that a jury will decide whether 90 E.I. du Pont de Nemours employees were owed warnings about the risks of handling the hazardous material, while strongly suggesting in its opinion that the distributor knew its product was dangerous. In permitting the former DuPont chemical plant workers to pursue claims that the Charles A. Wagner Co. failed to warn them of the risks posed by asbestos and materially misrepresented to DuPont that asbestos was not hazardous, the en banc panel declined to determine whether the mere supplier defense is in fact the law in Delaware. The court instead held that the defense does not apply to the case. Section 402 of the Restatement (Second) of Torts relieves a seller of the responsibility to either inspect or test manufactured goods unless the seller knows or has reason to know that the product poses a hazard to the buyer, the court said. “We hold that Section 402 does not apply to the plaintiffs’ claims for at least two reasons,” Chief Justice E. Norman Veasey wrote in In re Asbestos Litigation. “[First,] the product at issue here is not a manufactured good; and [second,] the plaintiffs’ duty-to-warn claim does not arise from the alleged failure to test or inspect the raw asbestos.” The panel’s decision Sept. 15 favored the plaintiffs despite national clamoring for reductions in asbestos litigation. Earlier this year, the American Bar Association urged Congress to pass a law that would restrict the types of asbestos-related injuries for which claimants may sue. In support of its resolution, the association said more than 600,000 asbestos cases have landed in the nation’s courts and forced more than 60 companies into bankruptcy. Nonetheless, the high court reversed the Superior Court’s grant of summary judgment in favor of Wagner, which was based partly on the trial court’s belief that the company was not obligated to warn the plaintiffs about asbestos because it had no reason to believe that asbestos was more dangerous than other substances it sold. Unlike the Superior Court, the state Supreme Court determined that Wagner was likely on notice that asbestos was dangerous. “We find that the plaintiffs have presented facts from which one can reasonably infer that the defendant, as a sales entity and specialty distributor of industrial minerals, was on notice of the dangers posed by asbestos exposure,” Veasey wrote. “A jury must determine whether the defendant knew or should have known of those hazards given its position in the chain of distribution of the asbestos products.” According to the opinion, the plaintiffs’ exposure to Wagner-supplied asbestos dates back to 1958 when DuPont first began purchasing short-fiber asbestos from the company. The asbestos was used as a sweeping compound to absorb spills on the floor of the Seaford chemical plant where plaintiffs worked. Wagner, the opinion states, served as a distributor for minerals including clay, pumice, talc and asbestos. The asbestos it sold to DuPont came from Asbestos Corp. Ltd., a Canadian producer that mined, crushed, dried and ground the material into short fibers. DuPont bought asbestos from Wagner until the distributor stopped carrying it in 1973, the opinion states. The plaintiffs argued before the Pennsylvania Supreme Court that the mere supplier defense should not be adopted as Delaware law, and that even if it does reflect state law, their claims do not implicate the defense. Wagner, the opinion states, responded by contending that should the mere supplier defense be deemed inapplicable, it would still be protected under Delaware’s Sealed Container Defense Law. The sealed container defense, codified in Title 18, Section 7001 of the Delaware Code, protects certain sellers of manufactured goods sold in closed containers. The court did not, however, determine whether Wagner was a seller entitled to the defense because the statute was enacted many years after the alleged wrongful conduct in the case. Turning to the defendant’s use of the mere supplier defense, the court emphasized that rather than arguing that Wagner should have inspected each bag of asbestos it received, the plaintiffs asserted that Wagner should have disclosed general information it knew about the hazardous material. Alternatively, the opinion states, the DuPont employees claimed the defendant should have discovered additional information about asbestos that was available in the industry. The court declined to address whether the mere supplier defense was the law in Delaware. Rather, it determined that Wagner could not avoid responsibility by claiming that as a supplier, it was nothing more than a mere conduit between the asbestos producer and DuPont, and therefore was not required to gather information that a producer or manufacturer should have known. The defendant did not merely ship asbestos to DuPont’s plant, Veasey said. Rather, Wagner acted as an agent for its suppliers, often purchasing asbestos directly, then marketing and selling its inventory to interested customers. “Because Wagner was more than a mere conduit of asbestos, we cannot conclude as a matter of law that Wagner owed its purchasers no duty to avail itself of information about asbestos hazards that was available in the industry,” the opinion states. “Wagner’s distribution business required familiarity with industry literature and a responsibility to become informed of known industry hazards. … Wagner also had an obligation to familiarize itself with state and federal regulations that questioned the safety of using asbestos.” The high court noted that even setting aside the inherent dangers of asbestos products, the plaintiffs raised a triable issue: namely, whether Wagner should have warned DuPont of the risks associated with handling a dusty material. The defendant required its own employees to wear respirators to protect them from dust, the opinion states. But Veasey said Wagner was unable to point to any facts demonstrating that an adequate warning was ever conveyed to plaintiffs’ employer. Finally, the court addressed the plaintiffs’ claim that Wagner had materially misrepresented asbestos as a safe product. In 1969, the opinion states, DuPont asked Wagner whether it had information concerning the fire and explosives hazards, toxicity or other unusual dangers associated with asbestos. According to the opinion, Wagner responded by stating that asbestos did not present any risk and was non-toxic, requiring only the normal precautions taken against any dusty material. The court held that there was enough evidence to create an inference that Wagner made a representation about the safety of its product. A jury could conclude that the defendant should have inquired into the dangers of asbestos before warranting its safety, the opinion states. “Wagner exposed its employees to asbestos, sought out buyers for its product and made representations about the safety of the product,” Veasey said. A trier of fact “could conclude that an entity exercising reasonable care under these circumstances would keep abreast of the literature on asbestos. The plaintiffs have presented facts from which a rational juror could infer that Wagner was on notice of the dangers of asbestos and owed the plaintiffs a duty to warn them either of the general dangers of handling material producing dust, or the more specific asbestos hazards of which the industry was becoming aware during the period that DuPont used Wagner’s sweeping compound.” Thomas Crumplar and David Arndt of Jacobs & Crumplar in Wilmington represented the plaintiffs. David Malatesta Jr. and John Kent of Kent & McBride in Wilmington and Philadelphia, respectively, served as counsel for the defendant. None of the attorneys could be reached prior to press time.

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