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Written By:  

Jeffrey Kaufman, Esq.
John R. Brydon, Esq.
James C. Parker, Esq.

Brydon Hugo & Parker
San Francisco, CA

I.         Introduction

Failure to warn is a principle theory of products liability.  In many cases the defendants include upstream raw material or component suppliers who sell to a manufacturer and have no contact with or opportunity to warn the end user.  These defendants could still be liable unless they warned the intermediary or took reasonable steps to see that the end user received notice.

The sophisticated intermediary doctrine can negate the duty to warn in some states.  It is premised on the common sense principle that there is no duty to warn someone of something they already know or of an obvious danger.

Moreover, the failure to warn a sophisticated intermediary of what it already knows cannot be a legal or proximate cause of the end user’s injury because telling the intermediary what it already knows would not change its conduct.

The sophisticated intermediary doctrine is a logical extension of the sophisticated user defense accepted in most states.  While we focus on California law, the reasoning applies anywhere.

II.        The Sophisticated User Defense

The purpose of a warning is to inform users of dangers unknown to them.  “The user of the product must be given the option either to refrain from using the product at all or to use it in such a way as to minimize the degree of danger.”  (Johnson v. American Standard, Inc. (2008) 43 Cal.4th 56, 65, citing Anderson v. Owens-Corning Fiberglas Corp. (1991) 53 Cal.3d 987, 1003.)

The logical exception to the rule has developed that one need not warn of an “obvious danger” or if the user is sophisticated and knows or should know the danger.  The obvious danger rule holds that “there is no need to warn of known risks under either a negligence or strict liability theory.”  (Johnson, supra, 43 Cal.4th at 67; Comment k to Section 388 subdivision (b) of the Restatement (Second) Torts; Taylor, supra, at 577; Bojorquez v. House of Toys, Inc. (1976) 62 Cal.App.3d 930, 933-934 [dangers of slingshots so obvious warnings are unnecessary].)

The obvious danger rule is the basis of the sophisticated user defense: “A manufacturer is not liable to a sophisticated user of its product for failure to warn of a risk, harm, or danger, if the sophisticated user knew or should have known of that risk, harm, or danger.” (Johnson, supra,  43 Cal.4th at 71 [HVAC manufacturers and technicians have known of dangers of phosgene gas since 1931, hence no warning of phosgene gas was required for plaintiff-technician].)

Both the sophisticated user and obvious danger defenses negate the causation element of a failure-to-warn theory; not warning a sophisticated user about known and appreciated dangers is not a legal cause of any harm that may result.  (Id.)  “The user's knowledge of the dangers is the equivalent of prior notice.” (Id., citing Billiar v. Minnesota Mining and Mfg. Co., 623 F.2d 240, 243 (2nd Cir. 1980) [“[N]o one needs notice of that which he already knows”].  See also, Chavez v. Glock, Inc. (Cal.Ct. App. July 24, 2012) 207 Cal.App.4th 1283 (a policeman tragically shot by his three year old son did not need to be warned about the dangers of his gun and its holster.)

III.      The Sophisticated Intermediary Doctrine

The logical extension of the sophisticated user defense is the sophisticated intermediary/purchaser doctrine.  A learned or sophisticated intermediary has been defined as “one who has knowledge of the danger and whose position vis-à-vis the manufacturer and consumer, confers a duty to convey the requisite warnings to the consumer.” (Brito v. County of Palm Beach, 753 So.2d 109, 111 n. 1 (Fla. 4th DCA 1998).)  “[I]f the employer/purchaser has ‘equal knowledge’ of the product’s dangers, then the manufacturer may be able to rely on the employer/purchaser to protect its own employees from harm.”  (Willis v. Raymark Industries, Inc., 905 F.2d 793, 796 (4th Cir., 1990).)

The sophisticated purchaser defense “absolves suppliers of the duty to warn purchasers who are already aware or should be aware of the potential dangers.”  (Akin v. Ashland Chemical Co., 156 F.3d at 1030, 1037 (10th Cir.1998).).

In Johnson, the California Supreme Court recognized that the rationale supporting the sophisticated user defense is that “’the failure to provide warnings about risks already known to a sophisticated purchaser usually is not a proximate cause of harm resulting from those risks suffered by the buyer’s employees or downstream purchasers.’”  (Johnson, supra, 43 Cal.4th at 65; emphasis added.)

Johnson relied on several cases applying the sophisticated purchaser defense.  Johnson cites with approval In re Related Asbestos Cases, 543 F. Supp. 1142, 1150-51 (N.D. Cal. 1982), which held that manufacturers of asbestos-containing equipment could assert that the purchaser, the U.S. Navy, “was as aware of the dangers of asbestos as were defendants and that the Navy nonetheless misused the products, thereby absolving the defendants of liability for failure to warn the Navy's employees of the products' dangers.”  (Id. at 1151.)  The California Supreme Court found that “reasoning persuasive.”  (Johnson, supra, 43 Cal.4th at 69.)

In Fierro v. International Harvester Co. (1982) 127 Cal.App.3d 862, also cited with approval in Johnson, International Harvester sold a truck body to decedent’s employer, who elected to run a power cable near the gas tank.  The truck accidently overturned and caught fire, killing decedent.

Appellants sued International Harvester, arguing it should have warned the employer, Luer, about the danger of running a power line near a fuel tank.  The appellate court disagreed:  “A sophisticated organization like Luer does not have to be told that gasoline is volatile and that sparks from an electrical connection or friction can cause ignition.”  (Id. at 866.)  The “absence of a warning to Luer did not substantially or unreasonably increase any danger that may have existed in using the International unit [citations omitted] and Luer’s failure to guard against those eventualities did not render the International unit defective.”  (Id. at 866-67.)

Thus, the knowledge of the intermediary, the employer, foreclosed any liability of the manufacturer to the ultimate user.

Johnson also cites with approval to cases in other jurisdictions addressing situations involving intermediaries.  In Akin, supra, 156 F.3d 1030, the court held there was “no duty to warn a purchaser as sophisticated as the United States Air Force of the potential dangers of low-level chemical exposure;” and even though the Air Force may not have actually known of hazards, “[b]ecause of the wealth of research available, the ability of the Air Force to conduct studies, and its extremely knowledgeable staff” it was a “knowledgeable purchaser” that “should have known the risks involved with low-level chemical exposure.” (Id. at 1037-1038; see also, In re Air Crash Disaster, 86 F.3d 498, 522 (6th Cir. 1996) [manufacturer could use sophisticated user defense against airline’s failure to warn claim].)

Other California cases reach a similar result.  (Zambrana v. Standard Oil Co. (1972) 26 Cal.App.3d 209, 218 [defendant installed stem extension on tire; danger obvious and defendant-installer not strictly liable]; Wiler v. Firestone Fire & Rubber Co. (1979) 95 Cal.App.3d 621, 629-630 [tire manufacturer could reasonably believe that a valve stem manufacturer and installer would take appropriate steps to insure proper design and installation of valve stem]; Plenger v. Alza Corp. (1992) 11 Cal.App.4th 349, 362 [manufacturer not strictly liable for patient’s death from infection after doctor’s implant procedure, despite lack of warnings, because a manufacturer need not “warn of a risk which is readily known and apparent to the consumer, in this case the physician”].)

Still other California cases also support recognition of the sophisticated intermediary or sophisticated purchaser defense when the intermediary is knowledgeable.  (See, e.g., Groll, supra, 148 Cal.App.3d at 448-49; Walker, supra, 19 Cal.App.3d at 674; Carmichael v. Reitz (1971) 17 Cal.App.3d 958, 989; cf., Garza v. Asbestos Corp., Ltd. (2008) 161 Cal.App.4th 651, 662, in which the court held an asbestos supplier liable to the ultimate user of a product when there was no evidence the intermediary manufacturer of the product was warned or was aware of the dangers of asbestos.  The implication is that those facts would change the result.)

Several federal courts have applied Johnson as supporting both the sophisticated user and sophisticated purchaser defenses.

In Hays v. A.W. Chesterton, Inc., 2012 WL 3096621 (E.D. Pa., May 1, 2012, MDL 875) the federal court interpreted Johnson as adopting the sophisticated user defense “even in cases involving an intermediary.”

In Gottschall v. General Elec. Co. (E.D. Pa., Dec. 9, 2011, MDL 875) 2011 WL 6424986, the federal court applied Johnson in a suit alleging plaintiffs’ decedent was exposed to asbestos when working on Navy ships built by defendant.  Summary judgment was granted on the sophisticated user doctrine since the un-contradicted evidence showed the Navy was a sophisticated user and the court rejected arguments that decedent was not a sophisticated user, or that defendant was really arguing for a “sophisticated intermediary defense” that should be left to the jury.  (See also, Donlon v. AC and S, Inc., 2013 WL 1880820 (E.D. Pa., Mar. 26, 2013, MDL 875), and Aikins v. General Elec. Co., 2011 WL 6415117 (E.D. Pa., Dec. 9, 2011, MDL 875).)

Even the earliest federal asbestos appellate decision, Borel v. Fibreboard Paper Products Corp., 493 F.2d 1076 (5th Cir. 1973), recognized the defense:

In general, of course, a manufacturer is not liable for miscarriages in the communication process that are not attributable to his failure to warn or the adequacy of the warning. This may occur, for example, where some intermediate party is notified of the danger, or discovers it for himself, and proceeds deliberately to ignore it and to pass on the product without a warning.

(Id at 1091-92.)

Numerous jurisdictions have recognized a sophisticated purchaser or sophisticated intermediary defense.  (In re Asbestos Litigation (Mergenthaler), 542 A.2d 1205, 1211 (Del. Super. 1986); Smith v. Walter C. Best, Inc., 927 F.2d 736, 741 (3d Cir. 1990); Forest v. E.I. DuPont de Nemours and Co., 791 F.Supp. 1460, 1465-1467 (D. Nev. 1992); Hoffman v. Houghton Chemical Corp., 434 Mass. 624, 631-634 (2001); Kennedy v. Mobay Corp., 84 Md.App. 397, 413 (Md. Ct. Spec. App. 1990), aff'd, (1992) 325 Md. 385 [“the defense is not only logical but necessary”]; Goodbar v. Whitehead Bros., 591 F.Supp. 552, 556-557 (W.D.Va. 1984), aff'd sub nom. Beale v. Hardy, 769 F.2d 213 (4th Cir.1985); O’Neal v. Celanese Corp., 10 F.3d 249, 251-52 (4th Cir.1993); Davis v. Avondale Indus., 975 F.2d 169, 172 (5th Cir.1992); Apperson v. E.I. du Pont de Nemours & Co., 41 F.3d 1103, 1108 (7th Cir.1994).)

The sophisticated user/purchaser defense is also consistent with the Restatement Second of Torts, section 388, which has been adopted as law in California.  (Stevens v. Parke, Davis & Co. (1973) 9 Cal.3d 51, 64.)  Comment k (“When warning of defects unnecessary”) explains that a supplier has a duty to give an adequate warning “if, but only if, he has no reason to expect that those for whose use the chattel is supplied will discover its condition and realize the danger involved.”

The comments to section 388 suggest a number of factors to consider as to whether a seller may rely upon an intermediary to warn downstream users.  Chief among them are the sophistication of the intermediary, the intermediary’s duty to warn, and the feasibility of the seller giving notice to the downstream users.

The oft-quoted passage in Comment n to section 388 rings true:  “Modern life would be intolerable unless one were permitted to rely to a certain extent on others' doing what they normally do, particularly if it is their duty to do so.”

IV.      Application Of The Sophisticated Intermediary Defense

The sophisticated intermediary defense is a potentially powerful one which could negate the duty to warn in many situations.  One case now pending before the California Supreme Court involves the broker of a hazardous raw material – asbestos -- sold to a sophisticated manufacturer, Johns-Manville.  (Webb v. Special Electric Company, Inc. (Cal. Ct. App. 2013) 153 Cal.Rptr.3d 882, as modified on denial of reh'g (Apr. 10, 2013), review granted (June 12, 2013) and opinion superseded sub nom. Webb v. Special Elec. Co. (Cal. 2013) 157 Cal.Rptr.3d 569.)

“From the 1920s to the 1970s, Manville was, by most accounts, the largest supplier of raw asbestos and manufacturer of asbestos-containing products in the United States.”  (Travelers Indem. Co. v. Bailey, 557 U.S. 137, 140 (2009).)  “In its heyday, Manville sold raw asbestos to manufacturers of asbestos-based products in 58 countries and distributed its own asbestos-based products ‘across the entire spectrum of industries and employment categories subject to asbestos exposure.’”  (In re Johns-Manville Corp. (2d Cir. 2008) 517 F.3d 52, 56 rev'd and remanded sub nom. Travelers Indem. Co. v. Bailey (2009) 557 U.S. 137).

In Webb, Johns-Manville manufactured Transite pipe using asbestos for which Special Electric was allegedly responsible.  Johns-Manville sold the pipe to one store which sold it to another.  Webb, an employee of the second store, was diagnosed with mesothelioma attributed in part to exposure to the Transite pipe.

While the trial court said telling Johns-Manville about asbestos was like telling the Pope about Catholicism, the California Court of Appeal held Special Electric had a duty to warn Johns-Manville and Webb of the hazards of asbestos.  The Supreme Court granted review.

Special Electric established Johns-Manville was fully aware of the hazards of asbestos, and there was nothing anyone could warn it about that Johns-Manville did not already know.  For its suppliers Johns-Manville prescribed not only the special bags that the asbestos was to be shipped in – specially designed to contain the fiber – but also the language of the warnings to be printed on each and every bag.  Johns-Manville was obviously aware of what the warnings should say.

Thus, whether or not warnings were given to Johns-Manville, or what those warning said, the risk to its employees or to users of its products was not impacted; nor were the warnings Johns-Manville was required to give.  Warnings to Johns-Manville would have made no difference and would not be a proximate or legal cause of injury to others.

Special Electric also argued it had no practical means of warning Webb.  It could not know which products asbestos attributed to it was used in or who the customers and end users were.  Warnings on the bags of asbestos would not reach the end user because the bags were discarded by Johns-Manville when it removed the asbestos.

A decision is expected in 2014.

Johns-Manville is a prime example of a sophisticated intermediary in toxic tort cases, but is certainly not the only one.  Supplier and component part defendants need to carefully consider the application of the sophisticated intermediary defense in their cases, and to develop the necessary evidence of knowledge and sophistication.

V.                Conclusion

The sophisticated intermediary doctrine is a natural outgrowth of the sophisticated user defense and the obvious danger rule, and also raises proximate and legal cause, as well as superseding cause, issues.  When it is available it is a potent defense to failure to warn claims, and should be considered and developed in appropriate cases.

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