On June 22, 2015, the California Courts of Appeal, Second Appellate District, Division Four, vacated summary judgment in an asbestos litigation that was granted for a manufacturer of brake grinding equipment that was allegedly used in conjunction with asbestos-containing brake linings. However, in 2012, the California Supreme Court previously concluded that manufacturers of "adjacent" products, that is, products made and sold by one manufacturer and used in conjunction with products made and sold by a second manufacturer, cannot be held liable for injuries caused by a harmful product that was neither manufactured nor supplied by the defendant. (See O'Neil v. Crane Co. (2012) 53 Cal.4th 335.) Nonetheless, by honing in on specific facts at issue in the Sherman, et al., v. Hennessy Industries, Inc. (LASC Case No.: BC252566), the Second Appellate District of the California Courts of Appeal applied what the Court has named "the Tellez-Cordova exception" in order to vacate summary judgment.
In Sherman, et al., v. Hennessy Industries, Inc., Plaintiffs alleged that their Decedent, Debra Jean Sherman, was exposed to asbestos dust carried home by her husband, Michael Sherman, due to his work as a mechanic between 1962 and 1977. Plaintiffs alleged that the asbestos dust was deposited on Mr. Sherman while he used an arcing machine manufactured by Hennessy that's "sole function" was to abrade asbestos-containing brake linings by means of sand paper moving at high speeds. Relying on the aforementioned holding in O'Neil, Hennessy filed a motion for summary judgment on the basis that its machine contained no asbestos and that it could not be held liable for injuries resulting from its use with products that it neither manufactured nor distributed. Hennessy further argued that its machine was not designed to be used exclusively with asbestos-containing brake linings as it could be used with non-asbestos-containing brake linings that were available in the 1960s and 1970s. On September 6, 2013, the lower court granted Hennessy's summary judgment motion.
In vacating Hennessy's summary judgment, the Second Appellate District focused on the holding in Tellez-Cordova v. Campbell-Hausfield/Scott Fetzger (2004) 129 Cal.App.4th 577. In essence, Tellez-Cordova held that there is an exception to the general rule barring imposition of liability on a manufacturer for harm caused by the product of another manufacturer, if the defendant's own product contributed substantially to the harm when the intended use of the product inevitably creates a hazardous situation. Applying the exception to Hennessy, the Second Appellate District identified two factors that are required to establish the necessary relationship between separately manufactured products to impose liability: (1) the manufacturer's product is necessarily used in conjunction with another product; and (2) the danger results from the use of the two products together. In order to meet the two requirements, the Second Appellate District looked at marketing materials of Hennessy to determine the intended and foreseeable use of the machine. To that end, the Court found that the intended and inevitable use of the Hennessy machine was for abrading asbestos-containing brake linings due to Hennessy's marketing of an asbestos dust collection system for the abrading machine in 1973.
However, the Second Appellate Court did not stop its analysis there. In response to Hennessy's contention that the exception could not apply because the machine was designed to be used with brake linings generally, without regard to the composition of materials used therein, the Second Appellate Court held that there is a policy rationale underlying the Tellez-Cordova exception. The Court stated that the relevant question is not whether asbestos-containing brake linings was necessary Specifically, because Hennessy's machine was only useable with certain products (i.e. brake linings), it indirectly derived economic benefit from the sale of those other products. As the combined use of the machine with the products inevitably created the hazardous condition, and Hennessy derived an economic benefit from the combined use of the machine and products, it was fair to require Hennessy to share in liability with the product manufacturers.
Based on the Court's holding inSherman, the general rule barring imposition of liability on a manufacturer for harm caused by the product of another manufacturer has been diminished significantly. However, the most disconcerting aspect of the Court's reasoning was the application of a policy consideration that seemingly condones imposing liability on an innovator specifically because it derives an economic benefit from its innovative product being used. Accordingly, manufacturers of products and equipment used in California must now be more diligent than ever in not only determining the safety of the products and equipment they manufacture, but also the safety of the products that are intended to be used in conjunction with those products or equipment.