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Breaking Legal Developments

07-23-2001

Published by:
Peter A. Lynch, Esq.
of Cozen O'Connor
palynch@cozen.com
http://www.cozen.com

 

EXECUTIVE SUMMARY:      This weekly newsletter covers:

  1. Massachusetts Supreme Court Finds Bulk Supplier Doctrine Defeats Plaintiff's Claims Arising Out of Explosion
  2. Alabama Supreme Court Finds Plaintiff's Fire Expert Failed to Prove Case


(1) MASSACHUSETTS SUPREME COURT FINDS BULK SUPPLIER DOCTRINE DEFEATS PLAINTIFF'S CLAIMS ARISING OUT OF EXPLOSION

In Hoffman v. Houghton Chem. Corp., No. SJC 08401 (July 19, 2001), the Massachusetts Supreme Court reviewed the use of the bulk supplier doctrine. The defendants manufactured and supply chemical products in bulk. Unocal supplied Gotham with acetone and methanol in fifty-five-gallon drums. Unocal and Houghton supplied Gotham with toluene, which was delivered by tanker truck and stored in Gotham's large underground storage tanks. All three chemicals, which were involved in the tragic explosion, are highly volatile, flammable solvents.

There was extensive testimony concerning the nature and extent of instructions and warnings given by the defendants to Gotham. Prior to the date of the explosion and in the course of their dealings with Gotham, both Unocal and Houghton periodically supplied Gotham with documents detailing the properties and safe handling of the chemicals. Houghton gave Gotham material safety data sheets (MSDS) for toluene that had been supplied by the manufacturer, Exxon. The MSDS warned the company, among other things, to keep toluene away from sparks and static electricity. The MSDS also contained "empty drum warnings," advising Gotham of the specific dangers relating to the reuse of empty containers. Houghton also provided its own empty drum warnings to Gotham.

On the day in question, the decedent Remolindo Hoffman, who had been instructed to prepare a batch of press wash, was transferring toluene from a grounded pump in the production area to a rusty, unreconditioned drum containing residue from a previous batch of press wash. A jury reasonably could have found that Hoffman used an ungrounded dolly to place the "empty" drum on the grounded weighing scale, and that he dispensed the toluene without attaching back-up grounding clips to the drum. The ungrounded solvent transfer created a static spark that ignited vapors in and around the drum, causing the blast.

Manifestly, the jury instruction at issue here concerned only the bulk supplier doctrine. The instruction directed the jury to determine whether the products were delivered in bulk; to assess whether the defendants gave "adequate and sufficient" warning about the products to the "immediate purchaser" (that is, to Gotham); and to determine whether the defendants' reliance on Gotham to warn the ultimate users of the products was reasonable in light of the latter's sophistication and ability to pass on its knowledge of product hazards. The instruction did not permit the jury to find that the defendants had no duty to warn the plaintiffs of the products' dangers, nor did it require the jury to assess the degree of the plaintiffs' sophistication about the products' dangers.

To avoid liability for failure to warn, however, the supplier must have "reasonable assurance that the information will reach those whose safety depends upon their having it." Among the factors that may determine reasonable reliance are "(1) the dangerous condition of the product; (2) the purpose for which the product is used; (3) the form of any warnings given; (4) the reliability of the third party as a conduit of necessary information about the product; (5) the magnitude of the risk involved; and (6) the burden imposed on the supplier by requiring that he directly warn all users."

First, as a practical matter, the nature and function of bulk products are different from those of many other consumer and industrial goods and thus require separate consideration. Bulk products often are delivered in tank trucks, box cars, or large industrial drums, and stored in bulk by the intermediary, who generally repackages or reformulates the bulk product. Even if the product could be labeled by the supplier, any label warnings provided to the intermediary would be unlikely to reach the end user. Often, too, the bulk product has multitudinous commercial uses. Toluene, for instance, is used in gasoline, as well as printing ink; acetone is an ingredient of both nail polish remover and press wash; methanol, another press wash component, commonly known as "wood alcohol," is used in antifreeze.

To impose on bulk suppliers a duty to warn all foreseeable end users directly where the product cannot readily be labeled for such users (if it can be labeled at all); where the intermediary is often in a different industry from that of the supplier, with different means of production; and where the end users themselves are a remote and varied lot would be unduly, indeed crushingly, burdensome. The judgments for the defendants were upheld.


(2) ALABAMA SUPREME COURT FINDS PLAINTIFF'S FIRE EXPERT FAILED TO PROVE CASE

In Ex Parte Mobile Power and Light Co., Inv. (No. 1992129), the Supreme Court of Alabama reviewed the trial court's granting of the defendant's motion for summary judgment. On August 20, 1996, a fire consumed Audrey and Brenda Loyd's home. This was the third fire the Loyds had suffered at the same home in a two-year period. In 1994, a fire heavily damaged their home. In 1996, a second fire erupted in the Loyds' panel box "only a few months prior to the [August 1996] fire." The Loyds hired Mobile Power, a private company, to repair their electrical system after the 1994 fire. In his deposition, plaintiff's expert technical consultant hired by Safeco to investigate the third fire, stated that a "fused disconnect" had been replaced after a second fire. Mobile Power was not involved in the second repair.

The homeowner and its insurer filed suit against Mobile Power claiming it negligently repaired the wiring causing the August 1996 fire. Plaintiff's expert had three theories of what could have caused the fire. The heating that caused the third fire might have developed over a period of two hours to a couple of weeks. He claimed: (1) improper lug torque during installation, (2) mechanical failure of the screwed lug, or (3) thermal shrinkage of the conductor inside the lug. Only opinion one dealt with conduct of the defendant. The trial court held based on other evidence those opinions were not sufficient to prevent the defendant's motion from being granted. The Court of Appeals had disagreed finding the doctrine of res ipsa loquitur applied.

The Alabama Supreme Court agreed with the trial court. First, the defendant in Bell v. Colony Apartments Co., Ltd., 568 So.2d 805 (Ala. 1990), had performed electrical work for Bell 30 minutes before the fire began. Here, the defendant had performed electrical work for the Loyds approximately two years before the fire. Second, the defendant in Bell had had exclusive management and control of the electrical panel box just before the fire began. In the Loyds' case, an unidentified third party had repaired the Loyds' electrical panel box in 1996 by replacing the "fused disconnect" -- after the second fire and before the third one. Mobile Power did not perform this work. Proof of that intervening work, as well as the intervening two-year period, established that Mobile Power lacked the exclusive management and control required for Safeco to successfully invoke the doctrine of res ipsa loquitur. Third, the evidence in Bell placed in question whether the defendant's employees were licensed electrical contractors, whereas the evidence in this present case established that Mobile Power's employees were licensed electrical contractors.

The court also held the plaintiff's expert's opinions were speculative at best. The trial court correctly relied on the testimony in entering the summary judgment for Mobile Power. Mobile Power was potentially responsible only under the first of three possible scenarios. As for the second and third possibilities, no conceivable negligence by Mobile Power could have caused a mechanical failure of the screwed lug or a thermal shrinkage of the conductor inside the lug. Safeco presented no evidence indicating that the first possibility was any more probable than the other two. Furthermore, Blunt's deposition established that Mobile Power used proper lug torque during installation; that precluded the first of plaintiff's three possible causes for the fire. The combined testimony failed to prove that the possibility of improper lug torque was more than conjecture. This Court has stated:

"There may be two or more plausible explanations as to how an event happened or what produced it; yet, if the evidence is without selective application to any one of them, they remain conjectures only. On the other hand, if there is evidence which points to any one theory of causation indicating a logical sequence of cause and effect, then there is a juridical basis for such a determination . . .."

The Alabama Supreme Court upheld the trial court's original holding.

Mr. Lynch can be reached at Cozen and O'Connor, 501 West Broadway, Suite 1610, San Diego, California 92101, 800-782-3366 (voice), 619-234-7831 (fax), palynch@cozen.com (e-mail), http://www.cozen.com. Follow us on Twitter at @firesandrain.

Please direct comments, suggestions, stories, and other items to the author by e-mail at palynch@cozen.com

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