Facts

Plaintiff David Johnson alleged that he was exposed, as an automotive mechanic, to a benzene-containing formula of Liquid Wrench, a rust penetrant, between 1966 and 1978. During the relevant time, Radiator Specialty Co. manufactured Liquid Wrench, and one formula of the product included a benzene-containing substance called raffinate, which U.S. Steel Corp. supplied in bulk shipments to Radiator.

PLAINTIFF'S CONTENTIONS:
Plaintiffs argued that, like asbestos, benzene-containing raffinate is inherently defective. Plaintiffs alleged that the Liquid Wrench labels contained insufficient warnings. Plaintiffs argued that Johnson developed acute myelogenous leukemia as a result of his exposure to Liquid Wrench, among many other products.

DEFENDANT'S CONTENTIONS:
Defendant argued that the "bulk supplier" and "sophisticated intermediary" doctrines should apply and absolve U.S. Steel of any responsibility. Defendants argued that several California appellate decisions had established that the applicability of the bulk supplier defense depends on whether the raw material provided by the bulk supplier was inherently defective, whether the raw ingredient was "substantially altered" by the downstream manufacturing process, and whether the bulk supplier had any control over how the manufacturer processed the bulk ingredient.

U.S. Steel argued that its raw material, raffinate, was not inherently defective, it was substantially altered when it was processed by Radiator and mixed with other materials, and U.S. Steel had no control over the design, manufacture, or sale of Liquid Wrench. Under the sophisticated intermediary doctrine, the intermediary, in this case, Radiator, must be sufficiently sophisticated, such that it is reasonable for the upstream supplier to believe that the intermediary will adequately warn the end user. U.S. Steel argued that Radiator was sufficiently sophisticated, because it had scientists on staff who tested the product, it consulted outside experts to better understand the constituents of the product and its resulting labeling obligations under the Federal Hazardous Substances Act, and based on the testing data it compiled with the FHSA's labeling requirements, including the use of specific "signal words" related to the benzene content.

In addition, U.S. Steel argued that it had provided adequate information to Radiator regarding the benzene content of raffinate. Defendants also argued that the FHSA's express preemption clause precluded the court from imposing any additional labeling requirements.

Result

Summary judgment in favor of the defense. The court found that, unlike asbestos-containing products, benzene-containing raffinate is not inherently defective. In addition, there was no dispute that Radiator, and not U.S. Steel, had designed, manufactured, and sold Liquid Wrench, and that U.S. Steel had no control over how the raffinate was processed and incorporated into the end product. For those reasons, U.S. Steel met the definition of a bulk supplier. The court also found that Radiator's warning labels, on Liquid Wrench, satisfied the Federal Hazardous Substances Act, and therefore preempted any argument that additional warnings were required and demonstrated that Radiator was sophisticated enough to understand the hazards associated with benzene-containing products. Radiator's sophistication, coupled with U.S. Steel's status as a bulk supplier, was dispositive.

Other Information

FILING DATE: Feb. 28, 2013.