In Gottschall v. Crane Co., (No. A136516, Filed 10/8/2014, published 10/22/2014), the Court of Appeal, First Appellate District, held a company that manufactured and sold asbestos-containing products could not prevail under the “sophisticated user” doctrine based on the contention that a “sophisticated intermediary” existed, in an action brought by the end user of the products.
Decedent Robert Gottschall worked in a variety of shipyards for the U.S. Navy between 1957 and 1989. Defendant Crane Co. (“Crane”) manufactured and sold products containing asbestos to the Navy during that time. During his work at the various shipyards, decedent was exposed to asbestos and contracted mesothelioma.
On February 5, 2010, decedent filed suit against Crane and 17 other defendants in San Francisco Superior Court. Decedent died on August 13, 2010, and his heir was substituted as Plaintiff. The substituted Plaintiff then filed suit in the Northern District of California federal court against six defendants, not previously named in the state court action. This action was transferred to the Eastern District Court of Pennsylvania.
In the Eastern District matter, another defendant, General Dynamics Corp., moved for summary judgment in federal court on the grounds the Navy was a “sophisticated user” of asbestos-containing material, and thus decedent’s claims failed. Plaintiff opposed the motion, arguing decedent was not a sophisticated user; thus, General Dynamics essentially was arguing that the presence of a “sophisticated intermediary” (the Navy) would preclude decedent and Plaintiff from recovering. The Pennsylvania federal court granted summary judgment, holding that under California law, the Navy was a “sophisticated user” thereby defeating decedent’s and Plaintiff’s claims as a matter of law.
Crane subsequently moved for summary judgment in the San Francisco Superior Court, contending that it too had supplied asbestos products to the Navy, and as a result of the Pennsylvania federal court’s decision and application of the “sophisticated user” doctrine, Plaintiff was collaterally estopped from re-litigating the issue in the superior court. The superior court granted Crane’s Motion, and Plaintiff appealed.
On appeal the Court first held the doctrine of collateral estoppel was inapplicable because a pure question of law was at issue, not a resolved issue of fact. The Court determined the Pennsylvania federal court misinterpreted the “sophisticated user” doctrine under California law.
Second, the Court held Crane had failed to proffer evidence that decedent was a sophisticated user of products and equipment containing asbestos. Specifically relying on the holdings of Stewart v. Union Carbide Corp. (2010) 190 Cal.App.4th 23 and Pfeifer v. John Crane, Inc. (2013) 220 Cal.App.4th 1270, the Court held California does not recognize a “sophisticated intermediary” theory. Thus, Crane’s contention that the Navy was a sophisticated intermediary and, that their knowledge should be imputed to decedent, failed as a matter of law.
This case is instructive because it clarifies that the “sophisticated user” defense may only be sustained by demonstrating the actual end users of equipment were sufficiently “sophisticated.” Merely demonstrating that the user’s employer was a “sophisticated user” is insufficient.
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