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Thursday, June 19, 2014

FORMAN PERRY LAWYERS WIN PRECEDENT-SETTING DECISION FOR US STEEL
Forman Perry Watkins Krutz & Tardy partners Phillip Sykes, Tim Gray, and Lea Ann Smith were granted summary judgment for their client, United States Steel Corporation. The trial court not only heard oral arguments presented by Sykes, but ordered supplemental briefing following those arguments to provide plaintiffs an additional opportunity to argue that benzene is an inherently dangerous product like asbestos to which the bulk supplier doctrine should not be applied. The underlying facts are that the plaintiff alleged that he developed a form of cancer, acute myelogenous leukemia (“AML”), from exposure to chemical products he encountered working as an automotive mechanic, and as a mechanic-hobbyist, generally from about 1970-2012. He sued more than 20 defendants. Specifically related to US Steel, Plaintiff claimed that he used a consumer product to loosen frozen or rusty nuts and bolts called “Liquid Wrench.” Radiator Specialty Company designed, manufactured, labeled, and sold Liquid Wrench. From 1960 to 1978, Radiator purchased a raw material in bulk supplies from US Steel called “raffinate” for use in one formula of its Liquid Wrench product. Raffinate contained varying percentages of benzene. Benzene was not – and is not – a banned chemical. In recognition of certain hazards associated with benzene exposure, federal law specifically prescribes the contents of the warning labels on benzene-containing consumer products like Liquid Wrench. Radiator was well aware of such requirements – based on warnings provided by US Steel, its own research, and its knowledge of published Federal Regulations (e.g., the Federal Hazardous Substances Act) – and at all relevant times Radiator labeled the raffinate-formula Liquid Wrench in accordance with such regulations. Nevertheless, plaintiff claimed that his alleged use of raffinate-formula Liquid Wrench was a substantial factor in contributing to his development of AML.

This decision sets an important precedent for component and bulk suppliers. They successfully argued that as a mere bulk supplier of a raw material, US Steel was several steps removed from end users, and therefore had no opportunity – and indeed no legal duty – to warn him. Moreover, Radiator was a sophisticated and sufficiently well-informed entity that understood the hazards associated with its Liquid Wrench product – and knew the strict federal regulatory scheme that applied to a benzene-containing consumer product. As such, US Steel’s duty to warn consumers was discharged when it provided the necessary hazard information to Radiator, and it was entitled to rely upon Radiator to pass such information on to purchasers of Liquid Wrench, consistent with federal requirements. Even if Radiator had failed to do so – which it did not – US Steel was not liable for such failure. In addition to arguing that US Steel satisfied any legal duty to warn vis a vis the bulk supplier doctrine, US Steel also moved for summary judgment on plaintiffs’ failure to warn claims based upon federal preemption through the Federal Hazardous Substances Act. Radiator also moved on that basis and the Court granted that motion. In its decision, the Court accepted US Steel’s arguments that it satisfied any duty to warn end users through its information provided to Radiator and its reasonable reliance upon Radiator to warn end users like plaintiff. In addition, the Court specifically rejected plaintiffs’ allegation that benzene is an inherently dangerous product like asbestos. This decision sets a precedent that is very beneficial for US Steel to defend similar cases nationally.
 

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