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Logo Icon Summary Judgment for the Bulk Supplier to a Sophisticated Buyer

There continues to be a lively debate, among the trial and appellate courts of California, as to whether or not a defendant who merely supplies raw materials for use in its customer's manufacturing processes may be sued by the end user of the finished product. In Walker v. Staffer Chemical Corp. (1971) 19 Cal.App.3d 669, and Artiglio v. General Electric Co. (1998) 61 Cal.App.4th 830, two different appellate courts held that the bulk supplier of raw materials to a sophisticated buyer, for use in manufacturing processes over which the supplier had no significant control, and which substantially altered the raw materials in question, had no liability to ultimate consumers who were injured while using the finished products.

The decision in Maxton v. Western States Metals (2012) 203 Cal.App.4th 81 extended this rationale to the case of an injured manufacturing employee who inhaled toxic dusts and fumes while using bulk stainless steel to fabricate his employer's products. However, in Ramos v. Brenntag Specialties, Inc. (2014) 224 Cal.App.4th 1239 [metal casting worker injured by inhaling toxic dusts and fumes], and Uriarte v. Scott Sales Co. (2014) 226 CA4th 1396 [sandblasting worker injured by inhaling silica sand], different divisions of the same appellate court held that raw material suppliers could be sued by an injured employee in such circumstances. The Ramos and Uriarte cases both are now under review by the California Supreme Court.

In the meantime, the latest contribution to this debate comes from Judge Wynne Carvill of the Alameda County Superior Court (ACSC). In Johnson v. Armored Autogroup (ACSC Case No. RG13669270), a benzene consumer exposure case, Judge Carvill granted summary judgment to U.S. Steel on the grounds that U.S. Steel was a bulk supplier of benzene-containing raffinate, which was used by Radiator Specialty Co., a sophisticated buyer who used raffinate in the formula for its rust penetrant product, Liquid Wrench.

In its motion for summary judgment, U.S. Steel presented evidence that (1) it sold benzene-containing raffinate in bulk to Radiator Specialty, (2) neither the benzene, nor the raffinate that contained it, was inherently dangerous or defective when used with proper safety precautions, (3) the benzene-containing raffinate was substantially altered by Radiator's manufacturing process, and (4) U.S. Steel had no significant control over Radiator's manufacturing process. These are the same factors applied in Walker, Artiglio, and Maxton. All three of those decisions concluded, in effect, that there is no sound policy reason, under such circumstances, to impose liability on the bulk supplier of raw materials.

The Ramos and Uriarte appellate decisions barely concealed their hostility to the result in the Maxton case. They reached the opposite result without ever addressing the policy issues that were discussed in Walker, Artiglio, and Maxton. The question to be answered is whether a bulk supplier of raw materials should ever be liable for injuries to the employee of a sophisticated buyer who manufactures a finished product, but not to an ultimate consumer who is injured while using the finished product. It is hoped that our Supreme Court will address this question, and harmonize these decisions, when it decides the Ramos and Uriarte cases now before it.