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January 18, 2012

You Can’t Use This "Crane" To Build A Case Against An “Adjacent” Product Manufacturer

Seller Beware: Consumer Protection Insights for Industry

In recent years, some California appellate courts held that a product manufacturer or seller is obliged to warn consumers against foreseeable risks associated with dangerous products with which its product will necessarily be used. Where a manufacturer could plausibly be alleged to be aware of possible harms stemming from what are sometimes termed "adjacent" products, these cases created a potential basis for consumer fraud claims. In O'Neil v. Crane Co., the California Supreme Court unanimously rejected these opinions, and provided helpful guidance on whether, and in what circumstances, a business may be held liable for harms attributable to an adjacent product.

"Adjacent" products include replacement components not manufactured by the original maker of the product or other, related products which are expected or required to be used in conjunction with another product. In Crane, the court of appeal followed earlier opinions holding that manufacturers of valves and pumps used in US Navy vessels could be liable for failure to warn servicemen who later handled replacement asbestos insulation not manufactured by the defendants. The Supreme Court reversed, notwithstanding that the harms suffered by the plaintiffs resulted from the foreseeable handling of asbestos products in connection with defendants' equipment.

Emphasizing that "foreseeability alone is not sufficient to create . . . a tort duty," the court concluded that "requir[ing] manufacturers to investigate potential risks of all other products and replacement parts that might foreseeably be used with their own products and warn about all of these risks . . . would impose an excessive and unrealistic burden" The court further recognized that a contrary rule would have the "perverse[] [effect of] . . . inundating users with excessive warnings."

The Supreme Court limited the breadth of its holding by identifying two circumstances in which claims based on adjacent products might nonetheless lie against a manufacturer. These exceptions involve circumstances in which "the defendant bears some direct responsibility for the harm" because

  1. the defendant's own product "contributed substantially to the harm" or
  2. the defendant "participated substantially in creating a harmful combined use of the products."

Companies whose products may be used in conjunction with other products may wish to evaluate whether either exception might potentially come into play and, if so, take the Crane holding into consideration in fashioning disclosures and warnings directed to consumers.

© Arnold & Porter Kaye Scholer LLP 2012 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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