Component Parts Doctrine Update


Among the eight divisions of the Second District Court of Appeal, there has been recent disagreement as to whether or not, under the component parts doctrine, a defendant who merely supplies raw materials for use in its customer's manufacturing processes may be sued by the customer's employee for injuries allegedly sustained as a result of exposure to the raw materials during those manufacturing processes. In 2012, Division Three of the Second District Court of Appeal answered this question in the negative, in Maxton v. Western States Metals (2012) 203 Cal.App.4th 81. However, in April 2014, Division Four of the same court reached a different result in Ramos v. Brenntag Specialties, Inc. (2014) 224 Cal.App.4th 1239. Now, in Uriarte v. Scott Sales Co. (2014) 226 CA4th 1396, Division One has followed the Ramos decision, and has disagreed with the Maxton decision.

Recently, the California Supreme Court granted review of the Ramos decision, and ordered the depublication of the Ramos decision. The grant of review by the Supreme Court renders the Ramos opinion superseded and makes it noncitable. In other words, no party, including the plaintiff, may rely on the Ramos decision until the Supreme Court disposes of the review.

In Maxton, the plaintiff was a worker who alleged that he was injured by exposure to metal dusts inhaled during the use of bulk metal bar stock in his employer's metal fabrication processes. The trial court had sustained demurrers to the complaint based on its reading of the component parts doctrine. The appellate court affirmed the trial court's order, holding that a worker injured by raw materials used in his employer's manufacturing processes could not sue the raw materials suppliers, so long as (1) the raw materials were supplied in bulk to a sophisticated purchaser, (2) the raw materials were not inherently dangerous, (3) the raw materials were substantially changed during the manufacturing process, and (4) the supplier had no significant control over the use of the raw materials. (See Artiglio v. General Electric Co. (1998) 61 Cal.App.4th 830.) The rationale for this decision was that, where these factors are present, the employer, not the raw materials supplier, is in the best position, as a matter of public policy, to determine how raw materials will be purchased and safely used in its manufacturing processes.

In Ramos, the plaintiff was a worker who alleged that he was injured by the exposure to toxic fumes and dusts inhaled during the use of raw materials in his employer's metal casting processes. The Ramos court reversed the trial court's order sustaining demurrers that were based on the Maxton decision. The Ramos court flatly disagreed with the Maxton decision, and refused to apply its holding. Instead, the Ramos court held that raw materials suppliers may be held liable if those materials cause injury to a worker when used as intended in his employer's manufacturing processes.

The Uriarte case involved a sandblasting worker who alleged that he was injured by the inhalation of silica sand used in his employer's sandblasting processes. The Uriarte court followed Ramos, and expressly disagreed with Maxton, holding that the component parts doctrine, as interpreted in Maxton, only could be applied to injury claims by end users of finished products after a supplier's raw materials had been fully integrated into that product. According to the Uriarte court, the rationale for the component parts doctrine – to avoid requiring component sellers to develop sufficient expertise in myriad manufacturing processes to oversee the decisions of its customer – has no application where there is an injury claim by one of the customer's employees.

The California Supreme Court's grant of review of the Ramos decision probably will lead to one of three potential results. It may be that the Maxton decision will be reaffirmed, but limited to cases where, as in Maxton, the raw material in question is highly fungible, highly versatile, and does not have a specific intended use. However, if the Supreme Court agrees that there is no reason to restrict the component parts doctrine to lawsuits by end users of finished products, as Ramos and Uriarte both held, it might adopt the Maxton decision in its entirety. The Supreme Court might agree with the Ramos and Uriarte decisions on policy grounds, and do away with Maxton completely.

The opening briefs to the Supreme Court are due in September 2014. The results promise to be of interest to all suppliers of bulk products and raw materials used by their customers in manufacturing.

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