Posted on: 9/25/2012
Brian James Schneider, Moran Reeves Conn
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In In re: Asbestos Litigation, 2012 Del. Super. LEXIS 177 (Del. Sup. Ct. Feb. 15, 2012), the estate of a deceased Navy sailor alleged exposure to asbestos-containing products while serving aboard fighting ships. A number of defendants argued that because the exposures allegedly occurred aboard Navy ships, maritime law should govern the substantive legal issues. Relying on the U.S. Supreme Court’s most recent pronouncement on the question, Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527 (1995), as well as three lower court decisions post-dating Grubart, the trial court agreed that maritime jurisdiction reached the plaintiff’s alleged exposures and that maritime law therefore applied. This article examines the legal underpinnings of the Delaware decision and challenges the emerging trend among a handful of courts holding that, under Grubart, maritime jurisdiction properly extends over asbestos product liability litigation.
The Grubart Test for Maritime Jurisdiction
Under Grubart, the party asserting the application of maritime jurisdiction must satisfy a two-part test. First, the party must satisfy the “locality” test, demonstrating that the alleged negligence occurred in the navigable waters of the United States. There was no question in the Delaware case that the decedent alleged exposure while serving aboard ships afloat. As such, his claims satisfied the location prong of the Grubart test.
Second, the party must satisfy a “connection” (or “nexus”) test for maritime jurisdiction. This element of the Grubart test is, in turn, comprised of two prongs: (i) whether (reviewed at what the Supreme Court described as an “intermediate level of possible generality”) the “general features” of the “type of incident involved” have a “potentially disruptive impact on maritime commerce”; and (ii) whether the “general character of the activity giving rise” to the injury shows a “substantial relationship to traditional maritime activity.” It is this “substantial relationship” prong of Grubart’s connection test on which courts have increasingly focused—and consequently so does this article—as they determine the reach of maritime jurisdiction to product liability cases.
The Three Decisions on Which the Delaware Court Relied Misapply the “Substantial Relationship” Test of Grubart
Lambert v. Babcock & Wilcox Co. (S.D. Ind. 1999)
In finding that maritime jurisdiction extends over asbestos product liability suits, the Delaware Superior Court relied on three decisions (two federal and one state) from other jurisdictions. The first of these, Lambert v. Babcock & Wilcox Co., 70 F. Supp. 2d 877 (S.D. Ind. 1999), also addressed claims by a Navy sailor for asbestos exposure. In finding that the plaintiff’s claim satisfied the “substantial relationship” test, the district court defined the activity in question as “the maintenance and operation of a ship’s boiler room,” which the court held was “vital to the ship’s ability to conduct maritime related activities.” As the Delaware court recognized in describing this language from Lambert, “the court focused on the ship’s activity rather than that activity of the manufacturers who provided the asbestos-containing products at issue.”
The U.S. Supreme Court made clear in Grubart that the inquiry to be made under the “substantial relationship” prong is to “ask whether a tortfeasor’s activity, commercial or non-commercial, on navigable waters is so closely related to activity traditionally subject to admiralty law that the reasons for applying special admiralty rules would apply in the suit at hand.” Thus, the only relevant activity to application of the “substantial relationship” prong is that of the defendant, not the activity of the ship on which a defendant’s products might eventually be incorporated.
John Crane, Inc. v. Jones (Va. 2007)
The second case cited by the Delaware court, John Crane, Inc. v. Jones, 650 S.E.2d 851 (Va. 2007), presented a claim of asbestos exposure by a shipyard worker while repairing vessels afloat at a shipyard. There the defendant argued that “the manufacture and sale of asbestos-containing products into the stream of commerce is too far removed from traditional maritime activities to create the necessary relationship” that would support the exercise of maritime jurisdiction. Rejecting that argument and exercising maritime jurisdiction, the Virginia Supreme Court reasoned that the defendant’s marketing of products to the “marine industry” was an activity that bore a substantial relationship to traditional maritime activities. That the company did not directly undertake any activity aboard a maritime vessel, according to the Virginia Supreme Court, did not obviate the maritime connection.
But such a conclusion runs contrary to federal precedent. First, as the en banc Fourth Circuit explained in Oman v. Johns-Manville Corp., 764 F.2d 224, 226-31 (4th Cir. 1985), relying on the marketing of products as a basis for federal maritime jurisdiction is “inconsistent with the U.S. Supreme Court’s opinions” on maritime jurisdiction because the nexus test would be met with products whose use do not raise traditional maritime concerns. At the same time, other products that do invoke maritime concerns—but were not designed, advertised and marketed as maritime products—would not satisfy the nexus test. Simply put, while marketing activities might be relevant in the context of a product that is uniquely and traditionally a maritime product, like an anchor, the mere fact that an advertisement for a product appears in marine literature does not transform an otherwise “generic” product into a maritime product.
Reliance on marketing activity also runs afoul of Grubart, which instructs that courts are to look at a defendant’s activity “on navigable waters.” This makes sense when what is being considered is not the exercise of personal jurisdiction. Thus, the inquiry is not whether and what sort of activity (like marketing or advertising) a defendant directed towards a particular state in order to establish jurisdiction over that party. Instead, as the Grubart Court reiterated, the question is one of subject matter jurisdiction, in particular, whether a defendant’s acts are “so closely related to activity traditionally subject to admiralty law that the reasons for applying specialty admiralty rules would apply in the suit and hand.”
Ultimately, other than briefly summarizing Jones, the Delaware court never references the decision and does not cite it as support for the exercise of jurisdiction under the “substantial relationship” prong. This may well be because the Jones court’s emphasis on land-based marketing by a land-based company was not relevant to the subject matter jurisdiction inquiry established in Grubart.
Conner v. Alfa Laval, Inc. (E.D. Pa. 2011)
The Delaware Superior Court finally relied upon an opinion from the asbestos MDL in Conner v. Alfa Laval, Inc., 799 F. Supp. 2d 455 (E.D. Pa. 2011), in support of the exercise of maritime jurisdiction. In Conner, which also involved asbestos claims brought on behalf of Navy sailors, the court focused on the products of the defendants rather than the activity taking place onboard ship. Against the backdrop of numerous federal appellate courts that have unanimously held that maritime jurisdiction does not reach land-based product manufacturers (discussed more fully below), the Conner court reached a contrary conclusion. In so holding, the MDL court distinguished those appellate decisions by asserting that “unlike the asbestos manufacturers who were defendants” in those cases, whose products were asbestos insulation, “the products manufactured in these cases—turbines, pumps, purifiers, generators, boilers, valves, gaskets, packing, and steam traps—were essential for the proper functioning of ships and made for that purpose.”
It is worth noting that the typical asbestos-containing products at issue in Navy (and non-Navy) cases include insulation, gaskets, and packing. The equipment manufacturers (turbines, pumps, valves, etc.) mentioned in Conner are sued in turn for the inclusion of these components in their equipment. With this context in mind, it is hard to understand how a strand of packing in a valve stem is any more “essential” to the proper operation of a vessel than is the insulation—to which maritime jurisdiction has been held unanimously not to apply—that is ubiquitous onboard Navy fighting ships.
The Decision of the Delaware Superior Court Runs Contrary to Unanimous Decisions from Eight Federal Courts of Appeal
Describing the three decisions above as a “sharp turn” from pre-Grubart decisions on maritime jurisdiction in asbestos cases, the Delaware court briefly recognized that earlier circuit court decisions reached a contrary conclusion. Indeed, every federal appellate court that has considered the issue—the First, Second, Third, Fourth, Fifth, Sixth, Ninth, and Eleventh Circuits, totaling more than 25 federal appellate judges—has unanimously concluded that maritime jurisdiction is not properly exercised over product liability claims for asbestos-related disease. See, e.g., Eagle-Picher Indus., Inc. v. United States, 846 F.2d 888, 896 (3d Cir. 1988); Petersen v. Chesapeake & Ohio Ry. Co., 784 F.2d 732, 734 (6th Cir. 1986); Oman v. Johns-Manville Corp., 764 F.2d 224, 226-31 (4th Cir. 1985) (en banc); Woessner v. Johns-Manville Sales Corp., 757 F.2d 634, 643-49 (5th Cir. 1985); Myrhan v. Johns-Manville Corp., 741 F.2d 1119, 1120-22 (9th Cir. 1984); Harville v. Johns-Manville Corp., 731 F.2d 775, 778-86 (11th Cir. 1984); Austin v. Unarco Indus., Inc., 705 F.2d 1, 3-14 (1st Cir. 1983); Keene Corp. v. United States, 700 F.2d 836, 844 (2d Cir. 1983).
The Delaware court summarily dismissed these decisions because “they were not decided under the jurisdictional test as fully articulated in Grubart.” With respect to the framework of these earlier cases, the Court in Grubart expressly recognized that its test and those of the federal courts of appeals were both “aimed at the same objectives … the elimination of admiralty jurisdiction where the rationale for the jurisdiction does not support it.” Equally as important, nowhere in Grubart —which did not deal with product liability claims generally or asbestos specifically—does the Court ever even suggest (much less hold) that the eight federal circuits had reached the wrong decision. In fact, these decisions continue to be cited as good law. See, e.g., O’Dwyer v. B & KConstr. Co., 2009 U.S. App. LEXIS 9342 at *22-25 (5th Cir. Apr. 30, 2009) (relying on Woessner); Bodnar v. Hi-Lex Corp., 919 F. Supp. 1234, 1241 (N.D. Ind. 1996) (distinguishing Harville, not finding it overruled by Grubart).
Not only are the two bodies of cases “aimed at the same objective” of excluding cases from the reach of maritime jurisdiction, the decisions of the federal appellate courts can easily be reconciled with the test articulated in Grubart. Both apply “locality” and “connection” tests. Both examine the “connection” test under the same “disruptive impact” and “substantial relationship” prongs. It is only in their examination of the “substantial relationship” prong of the connection test that the lower federal appeals courts looked at essentially four elements (rather than two): (i) the function and roles of the parties; (ii) the types of vehicles and instrumentalities involved; (iii) causation and the nature of the injury suffered; and (iv) traditional concepts of admiralty rules.
The importance of the lower court decisions is not in how they framed the test, but that they reached unanimous conclusions that fit neatly within Grubart’s articulation of the connection test. As those lower courts explained, the asbestos fibers themselves, the products into which asbestos was incorporated, the tools used on asbestos-containing products, and any safety equipment “possess few maritime attributes.” Owens-Illinois, Inc., 698 F.2d at 971; Woessner, 757 F.2d at 646. They are not designed “specifically for maritime use,” but are instead “used in a variety of land-based plants and refineries.” Keene, 700 F.2d at 844. In short, these products have “no uniquely maritime character.” Harville, 731 F.2d at 785; accord Oman, 764 F.2d at 229-30.
Grubart’s discussion of what constitutes a sufficient connection to admiralty does not suggest a different approach to this qualitative analysis. To the contrary, like the circuit court opinions, Grubart says that the overarching interest of the jurisdictional inquiry is “to ask whether a tortfeasor’s activity…on navigable waters is so closely related to activity traditionally subject to admiralty law that the reasons for applying special admiralty rules would apply in the suit at hand.” As the Court went on to explain, maritime law is: "designed and molded to handle problems of vessels relegated to ply the waterways of the world, beyond whose shores they cannot go. That law deals with navigational rules – rules that govern the manner and direction those vessels may rightly move upon the waters. When a collision occurs or a ship founders at sea, the law of admiralty looks to those rules to determine fault, liability, and all other questions that may arise from such a catastrophe. Through long experience, the law of the sea knows how to determine whether a particular ship is seaworthy, and it knows the nature of maintenance and cure. It is concerned with maritime liens, the general average, captures and prizes, limitation of liability, cargo damage, and claims for salvage."
Indeed, through its discussion of its decision in Sisson v. Ruby, 497 U.S. 358 (1990), Grubart makes clear why expansion of maritime jurisdiction over product liability claims is not contemplated by the Constitution. In Sisson, the defendant owned a vessel that he kept docked at a marina. A fire erupted in the vessel’s washer/dryer unit, damaging other vessels and the marina. Invoking federal law that limits maritime liability, the vessel owner in Sisson proactively asserted maritime jurisdiction to minimize his exposure for damages. Thus, as the Court explained in Grubart, the party seeking maritime jurisdiction in Sisson (like the party in Grubart) was the vessel owner, a truly maritime party.
In contrast, the Court in Grubart found it important to recognize the distinction between that vessel owner and the actual manufacturer of the washer/dryer unit that was the apparent source of the fire: “the activities of the washer/dryer manufacturer, who was possibly an additional tortfeasor…were hardly maritime…” This same rationale was employed by a federal district court in Florida. In Harris v. Flow International Corp., 2007 U.S. Dist. LEXIS 75977 (M.D. Fla. Oct. 12, 2007), the plaintiff claimed injury from an industrial strength washer that he was using while cleaning and scraping the hull of a ship. The court likened the manufacturer of the washer to the washer/dryer manufacturer in Sisson, and concluded that the washer manufacturer in its case did not satisfy maritime jurisdiction.
The Delaware Superior Court acknowledged that the activities of product defendants may not “lie at the heart of traditional maritime activities,” and even conceded that their conduct was “a far cry from the maritime-related activities of the barge owner in Grubart, or the owner of the yacht docked at a marina in Sisson.” Nevertheless, the court reasoned that the conduct of product suppliers does “relate to systems that are ‘essential for the proper functioning of ’ naval ships, at least more than washer/dryers.”
This rationale not only places the jurisdictional analysis on a slippery slope, it makes difficult the identification of any product aboard a ship (other than, apparently, a washer and dryer) that would not invoke maritime jurisdiction. More fundamentally, like the federal trial court in Lambert, the Delaware court focused on the ship’s activity—what was and was not “essential” to the specific functioning of a Navy vessel—rather than the activity of any manufacturer who provided the asbestos-containing product at issue.
Like the product manufacturers discussed in Grubart, and as unanimously recognized by the federal appellate courts, the activities of a land-based product manufacturer, whose goods end up on a vessel, are “hardly maritime” in nature. As those courts recognized, framing their findings in the language of Grubart, the conduct of those product suppliers is not “closely related to activity traditionally subject to admiralty law,” nor does their business invoke “the reasons for applying special admiralty rules.”
The Constitution makes clear that the exercise of admiralty jurisdiction must be “scrupulously confined” to the limits contemplated therein. Courts therefore must “proceed with caution” to ensure that the sovereign rights of states are not infringed. Exec. Jet Aviation, Inc. v. City of Cleveland, 409 U.S. 249, 272-73 (1972). Thus, it is hoped here that courts will restrain the expansion of maritime jurisdiction to these garden variety product liability cases, to which the federal appellate courts have consistently held maritime jurisdiction not to apply.
Brian J. Schneider, a 2000 graduate of the University of Richmond Law School, is a partner with Moran Reeves & Conn in Richmond, Virginia, where his practice focuses on the defense of corporations in product liability and toxic tort litigation. Mr. Schneider can be reached by email at firstname.lastname@example.org.