Evelyn Nye v. Bayer Cropscience, Inc.

IN THE SUPREME COURT OF TENNESSEE
AT KNOXVILLE
September 2, 2010 Session
EVELYN NYE v. BAYER CROPSCIENCE, INC., ET AL.
Appeal by Permission from the Court of Appeals, Eastern Section
Circuit Court for Hamilton County
No. 06C760 W. Neil Thomas, III, Judge
No. E2008-01596-SC-R11-CV - Filed June 7, 2011
In this products liability case, a widow sought compensation for the death of her
husband from mesothelioma allegedly caused by exposure to asbestos at his workplace. She
sued the company that sold products containing asbestos to her husband’s employer. She
based her claim on strict liability and alleged that the seller sold defective products and failed
to warn her husband of the products’ health risks. The jury found that the seller was at fault,
but that her husband’s employer was the sole cause of his injury and awarded her
nothing. The widow appealed. The Court of Appeals reversed and remanded for a new trial
based on erroneous jury instructions that more probably than not affected the judgment of
the jury. On review, we hold that the seller was subject to suit in strict liability, pursuant to
Tennessee Code Annotated section 29-28-106(b) (2000), because none of the products’
manufacturers were subject to service of process. Further, we hold that the trial court erred
by instructing the jury that the seller could not be held liable for failure to warn if the jury
found that the consumer, identified as the employer, was already aware of any danger in
connection with the use of the products or if the employer had been given adequate
warnings. This jury instruction was erroneous for two reasons. First, it applied the learned
intermediary doctrine, which the courts of this state have limited to medical products and
pharmaceuticals. Second, the jury instruction misidentified the consumer as the employer,
when the consumer who was required to be warned was the employee, Mr. Nye. Because
the error more probably than not affected the judgment of the jury, the judgment of the trial
court is reversed and the cause is remanded for a new trial.
Tenn. R. App. P. 11 Appeal by Permission; Judgment of the Court of Appeals
Affirmed; Case Remanded
1
S HARON G. L EE, J., delivered the opinion of the Court, in which C ORNELIA A. C LARK, C.J.,
and G ARY R. W ADE, J., joined. JANICE M. H OLDER, J., filed a separate opinion, concurring
in part and dissenting in part, in which W ILLIAM C. K OCH, J R., J. joined.
Hugh B. Bright, Jr., Michael J. King, and Latisha J. Stubblefield, Knoxville, Tennessee, for
the appellant, National Service Industries, Inc. f/k/a/ North Brothers, Inc.
Jimmy F. Rodgers, Jr., Chattanooga, Tennessee, and John E. (“Rett”) Guerry, III, and
Benjamin D. Cunningham, Mt. Pleasant, South Carolina, for the appellee, Evelyn Nye.
OPINION
Background
Hugh Todd Nye was diagnosed with malignant pleural mesothelioma in September
of 2005.1 He died from this disease on August 1, 2006. Mr. Nye’s mesothelioma was
allegedly caused by exposure to asbestos during the time he worked for DuPont at its
Chattanooga, Tennessee, facility from 1948 to 1985. As an operator on DuPont’s continuous
polymerization line, and during the course of his employment, Mr. Nye was often exposed
to dust arising from the removal of asbestos insulation from pipes in the areas where he
worked.
In May of 2006, Mr. Nye and his wife sued a number of defendants, including
National Service Industries, Inc., a successor in interest to North Brothers, Inc. (“North
Brothers”), seeking compensatory damages for injuries allegedly caused by Mr. Nye’s
exposure to asbestos-containing products at the DuPont facility. The Nyes asserted claims
sounding in negligence, strict liability, and breach of warranty against numerous named
manufacturers, sellers, and distributors of the asbestos-containing products.
In February of 2007, Mrs. Nye amended the complaint to allege Mr. Nye’s death from
mesothelioma on August 1, 2006. In addition to seeking damages for his death, she asserted
1
Mesothelioma is a relatively rare cancer of the thin membranes lining the chest and abdomen. It
is frequently observed among asbestos workers. Asbestos has been classified as a known human carcinogen
by the U.S. Department of Health and Human Services, the Environmental Protection Agency, and the
International Agency for Research on Cancer. Agency for Toxic Substances and Disease Registry, U.S.
Dep’t of Health & Human Servs., Toxicological Profile for Asbestos (2001), available at
http://www.atsdr.cdc.gov/toxprofiles/tp61-p.pdf.
2
that North Brothers2 sold asbestos-containing products to DuPont that had been manufactured
by Owens Corning Fiberglas Corporation (“Owens Corning”), Pittsburgh Corning
Corporation (“Pittsburgh Corning”), Raybestos-Manhattan, Inc. (“Raybestos”), and Johns
Manville Corporation (“Johns Manville”). In additional amended complaints, Mrs. Nye
alleged that these manufacturers had been judicially declared insolvent and were not
amenable to service of process.
North Brothers filed a Tennessee Rule of Civil Procedure 56 motion for summary
judgment. First, relying on Tennessee Code Annotated section 29-28-106(b),3 North
Brothers asserted that, as a non-manufacturing seller, it did not have a duty to warn with
regard to the products it sold. Second, it asserted that Mr. Nye’s employer, DuPont, was a
“sophisticated purchaser,”4 and, as such, knew about the danger of the asbestos-containing
products. North Brothers’ failure to warn, therefore, was not the proximate cause of Mr.
Nye’s injuries. Next, North Brothers asserted that Mrs. Nye’s strict liability claims failed as
a matter of law because the manufacturers of the products that North Brothers sold to DuPont
had not been judicially declared insolvent, as required by Tennessee Code Annotated section
29-28-106(b). Finally, North Brothers argued that Mrs. Nye’s claims were barred by the
2
Mrs. Nye also sued and made similar allegations as to Breeding Insulation Company, Inc. An order
of settlement and compromise was later entered as to Breeding Insulation Company, Inc.
3
Tennessee Code Annotated section 29-28-106(b) provides as follows:
(b) No “product liability action,” as defined in § 29-28-102(6), when based
on the doctrine of strict liability in tort, shall be commenced or maintained
against any seller of a product which is alleged to contain or possess a
defective condition unreasonably dangerous to the buyer, user or consumer
unless the seller is also the manufacturer of the product or the manufacturer
of the part thereof claimed to be defective, or unless the manufacturer of
the product or part in question shall not be subject to service of process in
the state of Tennessee or service cannot be secured by the long-arm statutes
of Tennessee or unless such manufacturer has been judicially declared
insolvent.
4
In its motion for summary judgment, North Brothers used the term “sophisticated user.” In its brief
to this Court, North Brothers noted that in its trial court pleadings, it used the term “sophisticated user” as
synonymous with “learned intermediary” or “sophisticated purchaser.” The sophisticated user doctrine
focuses on the ultimate user or consumer of the product, whereas the learned intermediary or sophisticated
purchaser doctrine focuses on the knowledgeable intermediary who intercedes between the supplier or
manufacturer and the ultimate user. See 63A Am. Jur. 2d Products Liability § 1091 (2010). For clarity, we
refer to the sophisticated purchaser doctrine in light of North Brothers’ statement that it intended to assert
that DuPont was a learned intermediary or sophisticated purchaser rather than a sophisticated user. The
sophisticated user doctrine is not at issue in this appeal.
3
four-year statute of repose under Tennessee Code Annotated section 28-3-202 (2000) and
that her breach of warranty claim was barred by the statute of limitations under Tennessee
Code Annotated section 47-2-725 (2001).
The trial court granted summary judgment to North Brothers on the breach of warranty
claims based on the statute of limitations. The trial court granted a partial summary judgment
to North Brothers based on the statute of repose for any sales occurring before June 30,
1969. The trial court determined there were disputed genuine issues of material fact as to the
other grounds, and denied summary judgment. The trial court did not rule on whether a
claim in strict liability could be asserted against North Brothers pursuant to Tennessee Code
Annotated section 29-28-106(b).
Thereafter, both parties by motion5 requested the trial court to decide the issue of
whether North Brothers was subject to a strict liability suit based on Tennessee Code
Annotated section 29-28-106(b) as a result of the pending Chapter 11 bankruptcies of Owens
Corning, Pittsburgh Corning, Raybestos, and Johns Manville. The trial court ruled that the
manufacturers were not amenable to service of process within the meaning of Tennessee
Code Annotated section 29-28-106(b), and therefore, North Brothers was subject to suit as
a non-manufacturing seller.
At the time of trial, all the named defendants had been dismissed except North
Brothers, and the strict liability claims for sale of defective products and failure to warn were
the only surviving claims. The trial court’s jury charge included the following instructions:
A manufacturer or a seller cannot be held liable for
failure to warn if you find that the consumer, DuPont, was
already aware of any danger in connection with the use of
asbestos-containing products, or if you find that adequate
warnings were given by manufacturers or sellers to DuPont.
....
In addition, if you find that DuPont failed to provide a
safe workplace for Hugh Todd Nye and that this failure was the
sole cause of damage to him, then you have found DuPont was
5
North Brothers filed a motion for reconsideration of its summary judgment motion requesting the
trial court to address the question of whether North Brothers was subject to a strict liability suit, and Mrs.
Nye filed motions in limine requesting the trial court to declare that these manufacturers were not amenable
to service of process.
4
the sole cause of his injury, and you may not consider the fault
of North Brothers or any other company supplying asbestos-
containing materials to DuPont.
The jury found North Brothers was at fault, but that DuPont was the sole cause of
Mrs. Nye’s damages and awarded her nothing. The trial court denied Mrs. Nye’s motion for
new trial, and she appealed. The Court of Appeals held that North Brothers could be held
strictly liable as a non-manufacturing seller because the manufacturers whose products North
Brothers sold were not amenable to service of process due to their bankruptcy
proceedings. The Court of Appeals further ruled that the trial court committed harmful error
in its instructions to the jury and reversed the jury’s verdict and remanded for a new trial.
We granted North Brothers’ application for permission to appeal and address two
issues: 1) whether North Brothers, as a non-manufacturing seller, is subject to suit in strict
liability pursuant to Tennessee Code Annotated section 29-28-106(b) and 2) whether the trial
court committed harmful error in its instructions to the jury.
Analysis
North Brothers’ Liability as a Seller
We begin our analysis of whether North Brothers, as a non-manufacturing seller, is
subject to suit in strict liability pursuant to Tennessee Code Annotated section 29-28-106(b),
with a brief recitation of the facts and a general discussion of the basis for the strict liability
claims in this case.
Mr. Nye began working for DuPont at its Chattanooga plant in 1948 and, except for
a brief period of military service, he worked there continuously until he retired in
1985. During this period, Mr. Nye worked on the plant’s continuous polymerization line
(“CP line”), a section of the plant involved in DuPont’s production of yarn. As part of his
job duties, Mr. Nye was required to conduct routine inspections of equipment located along
the CP line. Often, when he was conducting these inspections, maintenance crews were in
the same areas cutting and removing asbestos-containing insulation from pipes. Evidence
was presented that this was an anticipated use of the insulation. In addition to inspecting
equipment, Mr. Nye’s job duties required him to sweep the floor and pick up insulation
debris left after the maintenance crews had completed their work. Mr. Nye was frequently
exposed to visible dust arising from the removal of the asbestos-containing insulation by
work crews and from his own clean-up work. North Brothers sold asbestos-containing
insulation products used in the CP line to DuPont. These products included products
manufactured by Owens Corning, Pittsburgh Corning, Raybestos, and Johns Manville. There
5
is no proof that either DuPont or North Brothers warned Mr. Nye of the health risks
associated with exposure to the asbestos-containing products. North Brothers did not prepare
any written warning for DuPont or any other customers regarding the health risks associated
with the asbestos-containing products it sold, did not include any kind of warning to
accompany those products describing such dangers to ultimate users of the products like Mr.
Nye, and did not inquire as to whether DuPont was warning its employees of the products’
dangers. Both DuPont and North Brothers had been aware of the health risks of asbestos
since the 1960s. Expert evidence was presented that Mr. Nye’s exposure to the asbestos-
containing products sold by North Brothers was a contributing cause of his death from
mesothelioma.
Mrs. Nye’s suit named numerous defendant manufacturers and sellers, including
North Brothers, and asserted negligence, strict liability, and breach of warranty claims
against these defendants. By the time of trial, North Brothers was the sole remaining
defendant, and only the claims in strict liability, based on the sale of allegedly defective
products and failure to warn, were presented to the jury.
A commercial seller, such as North Brothers, may be liable in strict liability for
physical harm caused to a consumer by a defective product. Restatement (Second) of Torts
§ 402A (1965).6 Further, a product liability action7 may be brought against a manufacturer
6
Restatement (Second) of Torts section 402A provides as follows:
Special Liability of Seller of Product for Physical Harm to User or
Consumer
(1) One who sells any product in a defective condition unreasonably
dangerous to the user or consumer or to his property is subject to liability
for physical harm thereby caused to the ultimate user or consumer, or to his
property, if
(a) the seller is engaged in the business of selling such a product, and
(b) it is expected to and does reach the user or consumer without
substantial change in the condition in which it is sold.
(2) The rule stated in Subsection (1) applies although
(a) the seller has exercised all possible care in the preparation and sale of
his product, and
(b) the user or consumer has not bought the product from or entered into
any contractual relation with the seller.
7
Tennessee Code Annotated section 29-28-102(6) (2000) defines “product liability action”
as
all actions brought for on account of personal injury, death or property
damage caused by or resulting from the manufacture, construction, design,
6
or seller on strict liability grounds, with no proof of negligence, if the product causing injury
to person or property “is determined to be in a defective condition or unreasonably dangerous
at the time it left the control of the manufacturer or seller.” Tenn. Code Ann. § 29-28-105(a)
(2000); accord Owens v. Truckstops of Am., 915 S.W.2d 420, 431 (Tenn. 1996). Mrs. Nye
alleges that the asbestos-containing products sold by North Brothers were “unsafe for normal
or anticipatable handling and consumption,” pursuant to Tennessee Code Annotated section
29-28-102(2), at the time of their manufacture, sale, and delivery and at the time of Mr.
Nye’s exposure. Mrs. Nye contends that the asbestos-containing products manufactured by
Owens Corning, Pittsburgh Corning, Raybestos, and Johns Manville, and sold by North
Brothers, possessed latent defects at the time of their manufacture, sale, and delivery and at
the time of Mr. Nye’s exposure.
The other theory on which Mrs. Nye bases her strict liability claim is failure to
warn. We noted in Flax v. DaimlerChrysler Corp., 272 S.W.3d 521, 541 (Tenn. 2008) that
“Tennessee courts have long held that a manufacturer may be held strictly liable for failing
to warn consumers of the dangers of a particular product at the time of sale” and, citing
Tennessee Code Annotated section 29-28-102(6), that “[t]he General Assembly has also
acknowledged that a failure to warn claim is a valid basis for a product liability action.” Mrs.
Nye argues that the defendants failed to warn Mr. Nye that the asbestos-containing products
were harmful to his health, despite the fact that each defendant knew that the asbestos-
containing products were dangerous and would be used without inspection for defects.
North Brothers contends that, as a seller, it cannot be held strictly liable. North
Brothers relies on Tennessee Code Annotated section 29-28-106(b) and asserts that although
the four manufacturers whose products it sold have sought protection under Chapter 11 of
the United States Bankruptcy Code, this fact alone does not prove their insolvency. Further,
North Brothers asserts none of the manufacturers have been judicially declared insolvent and
all are subject to service of process in Tennessee. Accordingly, North Brothers argues, none
of the statutory prerequisites to suit in strict liability have been satisfied.
As to the matter of insolvency, a debtor need not be insolvent to qualify for protection
under Chapter 11 of the Bankruptcy Code. In re Mount Carbon Metro. Dist., 242 B.R. 18,
formula, preparation, assembly, testing, service, warning, instruction,
marketing, packaging or labeling of any product. “Product liability action”
includes, but is not limited to, all actions based upon the following theories:
strict liability in tort; negligence; breach of warranty, express or implied;
breach of or failure to discharge a duty to warn or instruct, whether
negligent, or innocent; misrepresentation, concealment, or nondisclosure,
whether negligent, or innocent; or under any other substantive legal theory
in tort or contract whatsoever.
7
32 (Bankr. D. Colo. 1999); In re Johns-Manville Corp., 36 B.R. 727, 732 (Bankr. S.D.N.Y.
1984). Because there is no proof that any of the four manufacturers has been judicially
declared insolvent, the insolvency statutory prerequisite has not been met.
We next consider whether Owens Corning, Pittsburgh Corning, Raybestos, or Johns
Manville were “not subject to service of process” so as to trigger the provisions of section
29-28-106(b). Our interpretation of this statute is a question of law and as such, is reviewed
de novo with no presumption of correctness. Chattanooga-Hamilton Cnty. Hosp. Auth. v.
Bradley Cnty., 249 S.W.3d 361, 365 (Tenn. 2008).
The primary rule governing our construction of any statute is to ascertain and give
effect to the legislature’s intent. Walker v. Sunrise Pontiac-GMC Truck, Inc., 249 S.W.3d
301, 309 (Tenn. 2008). To that end, we begin by examining the language of the
statute. Curtis v. G.E. Capital Modular Space, 155 S.W.3d 877, 881 (Tenn. 2005). In our
examination of statutory language, we must presume that the legislature intended that each
word be given full effect. Lanier v. Rains, 229 S.W.3d 656, 661 (Tenn. 2007). When the
language of a statute is ambiguous in that it is subject to varied interpretations producing
contrary results, Walker, 249 S.W.3d at 309, we construe the statute’s meaning by examining
“the broader statutory scheme, the history of the legislation, or other sources.” State v.
Sherman, 266 S.W.3d 395, 401 (Tenn. 2008). However, when the import of a statute is
unambiguous, we discern legislative intent “from the natural and ordinary meaning of the
statutory language within the context of the entire statute without any forced or subtle
construction that would extend or limit the statute’s meaning.” State v. Flemming, 19
S.W.3d 195, 197 (Tenn. 2000); see also In re Adoption of A.M.H., 215 S.W.3d 793, 808
(Tenn. 2007) (“Where the statutory language is not ambiguous . . . the plain and ordinary
meaning of the statute must be given effect.”). We “presume that the legislature says in a
statute what it means and means in a statute what it says there.” Gleaves v. Checker Cab
Transit Corp., 15 S.W.3d 799, 803 (Tenn. 2000) (quoting BellSouth Telecomms., Inc. v.
Greer, 972 S.W.2d 663, 673 (Tenn. Ct. App. 1997)).
The statutory phrase “not subject to service of process” is unambiguous; therefore, we
look to the plain and ordinary meaning of the statute. The phrase “subject to” is defined as
“liable to receive; exposed (with to).” Webster’s New World Dictionary of the English
Language 1452 (1966). The word “service” is defined as “[t]he formal delivery of a writ,
summons, or other legal process” and is “[a]lso termed service of process.” Black’s Law
Dictionary 1372 (7th ed. 1999) (emphasis in original). Correspondingly, “process” is defined
as “[a] summons or writ, esp. to appear or respond in court .” Id. at
1222. “Service of process,” therefore, necessarily presumes the existence of an underlying
lawsuit for which a summons or writ was issued. The plain and ordinary meaning of the
phrase “not subject to service of process” means not exposed to or liable to receive a
8
summons to appear in court on a underlying lawsuit. See Stafford v. Briggs, 444 U.S. 527,
553 n.5 (1980) (“[A]s a general rule, service of process is the means by which a court obtains
personal jurisdiction over a defendant.”); Griffin v. Roberts, No. M2002-01898-COA-R3-
CV, 2003 WL 21805299, at *2 (Tenn. Ct. App. Aug. 7, 2003). With this definition in mind,
we look to see whether any of the manufacturers were subject to being served with a
summons to appear in a pending lawsuit.
All of the manufacturers filed a petition under Chapter 11 of the federal Bankruptcy
Code, codified at 11 U.S.C. §§ 101-1532 (2006 & Supp. 2010).8 Upon the filing of the
Chapter 11 petition, the automatic stay provision applied, 11 U.S.C. § 362(a), and each
manufacturer was allowed to maintain its business operations while restructuring its debt
obligations pursuant to a submitted plan of reorganization. See 11 U.S.C. §§ 1101-
1174. The automatic stay provision, in pertinent part, provides that a petition operates as a
stay of
(1) the commencement or continuation, including the issuance
or employment of process, of a judicial, administrative, or other
action or proceeding against the debtor that was or could have
been commenced before the commencement of the case under
this title, or to recover a claim against the debtor that arose
before the commencement of the case under this title.
11 U.S.C. § 362(a) (2006).
With narrowly defined exceptions, section 362 stays any action against the debtor or
property belonging to the debtor or the bankruptcy estate. In re Winpar Hospitality
Chattanooga, LLC, 401 B.R. 289, 291 (Bankr. E.D. Tenn. 2009). The automatic stay, which
“is one of the fundamental debtor protections provided by the bankruptcy laws,” Lynch v.
Johns-Manville Sales Corp., 710 F.2d 1194, 1197 (6th Cir. 1983), serves “‘to provide the
debtor a ‘breathing spell’ from collection efforts and to shield individual creditors from the
effects of a ‘race to the courthouse,’ thereby promoting the equal treatment of creditors.’” In
re Webb Mtn, LLC, 414 B.R. 308, 335 (Bankr. E.D. Tenn. 2009) (quoting In re Printup, 264
B.R. 169, 173 (Bankr. E.D. Tenn. 2001)). “It permits the debtor to attempt a repayment or
reorganization plan, or simply to be relieved of the financial pressures that drove him into
bankruptcy.” Lynch, 710 F.2d at 1197. Consistent with its goal of insulating the debtor to
provide financial stability, “[t]he automatic stay is designed to protect the debtor from
8
Owens Corning filed its bankruptcy petition on October 5, 2000; Pittsburgh Corning on April 16,
2000; Johns Manville on August 26, 1982; and Raybestos on March 10, 1989.
9
judgments and the consequences thereof, such as the attachment of a judgment lien to the
debtor’s property.” Kliefoth v. Fields, 828 S.W.2d 714, 716 (Mo. Ct. App. 1992).
The stay applies to the commencement of an action to recover a claim against a debtor
that “arose before the commencement of the [bankruptcy] case.” 11 U.S.C. § 362(a)(1)
(2006) (emphasis added). Accordingly, we must determine when Mrs. Nye’s claims arose
relative to the filing of the four manufacturers’ bankruptcy petitions.
A “claim” is defined by the Bankruptcy Code to include a “right to payment, whether
or not such right is reduced to judgment . . . .” 11 U.S.C. § 101(5) (2006) (emphasis
added). The phrase “right to payment” is not defined in the Bankruptcy Code, and courts
have devised various tests to determine when right to payment arises with respect to a claim
in bankruptcy. The bankruptcy court has exclusive jurisdiction to determine the nature of the
claims and the extent of the automatic stay. Cf. Cathey v. Johns-Manville Sales Corp., 711
F.2d 60, 63 (6th Cir. 1983) (holding that the bankruptcy court has exclusive authority to grant
relief from stay).
Owens Corning filed its bankruptcy petition in the District of Delaware on October
5, 2000. See In re Owens Corning, 419 F.3d 195, 202 (3d Cir. 2005). Pittsburgh Corning
filed its bankruptcy petition in the Western District of Pennsylvania on April 16, 2000. See
In re Pittsburgh Corning Corp., 417 B.R. 289, 295 (Bankr. W.D. Pa. 2006). When Mrs. Nye
filed her complaint in 2006, the applicable test in the Third Circuit, which includes Delaware
and Pennsylvania, was the test set forth in Avellino & Bienes v. M. Frenville Co., 744 F.2d
332 (3d Cir. 1984). This test provided that a claim arises when the cause of action accrues
under state law. In “creeping disease” cases, such as asbestos-related injuries, Tennessee law
provides that the cause of action accrues with diagnosis of the disease. See Wyatt v. A-Best
Co., 910 S.W.2d 851, 856-57 (Tenn. 1995). Therefore, under the Frenville test, Mrs. Nye’s
claim arose in 2005 after Owens Corning and Pittsburgh Corning filed for bankruptcy and
therefore these manufacturers would not have been subject to the automatic stay. However,
the Frenville test was overturned by the Third Circuit in Jeld-Wen, Inc. v. Van Brunt (In re
Grossman’s, Inc.), 607 F.3d 114 (3d Cir. 2010), which held that “a ‘claim’ arises when an
individual is exposed pre-petition to a product or other conduct giving rise to an injury,
which underlies a ‘right to payment’ under the Bankruptcy Code.” Id. at 125. The Third
Circuit’s decision to overrule Frenville was made in the face of what the court deemed to be
well-reasoned “universal disapproval” of that decision, based on its apparent conflict with
the Bankruptcy Code’s expansive treatment of the term “claim.” Id. at 121.9 The plaintiff
9
Frenville has been “universally rejected,” In re Andrews, 239 F.3d 708, 710, n.7 (5th Cir.
2001), and has been described by one court as “one of the most criticized and least followed precedents
decided under the current Bankruptcy Code.” In re Firearms Imp. and Exp. Corp., 131 B.R. 1009, 1015
10
in Grossman’s, who contracted mesothelioma allegedly due to exposure to an asbestos-
containing product, asserted a claim against the product’s seller. Her exposure to the
asbestos-containing product occurred in 1977, years before the seller filed its Chapter 11
petition. The plaintiff’s manifestation of symptoms, diagnosis of mesothelioma, and lawsuit
occurred after the seller’s plan of reorganization had been confirmed by the bankruptcy
court. Under this newly adopted test, the plaintiff’s claim in Grossman’s was considered to
have arisen before the petition and therefore was subject to the automatic stay.
Mrs. Nye’s claim was pending and thus in the “pipeline” when the Grossman’s test
was adopted. The Grossman’s test has been applied retroactively to pending cases. Wright
v. Owens Corning, No. 09-1567, 2011WL 1085673 (W.D. Pa. March 21, 2011)10 ; see also
In re Rodriguez, 629 F.3d 136, 139 (3d Cir. 2010). Therefore, the pre-petition relationship
test adopted in Grossman’s is determinative as to when Mrs. Nye’s claims arose against
Owens Corning and Pittsburgh Corning. Applying the pre-petition relationship test to Mrs.
Nye’s claim, we conclude that her claim arose when her husband was exposed to the
asbestos-containing products. Therefore, these manufacturers were not subject to service of
(Bankr. S.D. Fla. 1991). In Grossman’s, the Third Circuit noted that a liberal treatment of the term “claim”
is dictated by Congressional intent, as evidenced by House Reports stating that the definition of “claim” at
section 101(5) is the “‘broadest possible definition [and it] contemplates that all legal obligations of the
debtor, no matter how remote or contingent, will be able to be dealt with in the bankruptcy case . . . [and]
permits the broadest possible relief in the bankruptcy court.’” Grossman’s, 607 F.3d at 121 (quoting
H.R.Rep. No. 95-595, at 309 (1977), reprinted in 1978 U.S.C.C.A.N. 5963, 6266); see also Lawrence R.
Ahern, III, & Darlene T. Marsh, Environmental Obligations in Bankruptcy, § 3:24 (2011).
10
In Wright, the plaintiff filed a putative class action by suing Owens Corning on November 24,
2009. The defendant argued that under the Frenville test, the claim was discharged in Owens Corning’s
bankruptcy. The federal district court noted that the Third Circuit had overturned Frenville and established
in Grossman’s a new test to determine when a claim exists for purposes of a bankruptcy proceeding. Even
though the plaintiff’s claim against Owens Corning was filed when the Frenville test was applicable law, the
district court applied the Grossman’s test retroactively, relying on the conclusion of the United States
Supreme Court in Harper v. Va. Dept. of Transp., 509 U.S. 86 (1993), that “‘a rule of federal law, once
announced and applied to the parties to the controversy, must be given full retroactive effect by all courts
adjudicating federal law,’ . . . and extended ‘to other litigants whose cases were not final at the time of the
[first] decision.’” Wright, 2011 WL 1085673, at *9 (quoting Harper, 509 U.S. at 96). Even without the
authority of Wright, we would have applied the Grossman’s test retroactively for two primary reasons. First,
the Frenville test was not sound law; its reasoning was flawed, and it was universally rejected by other
courts. We see no reason to perpetuate bad law. While we have a strong commitment to stare
decisis, “mindless obedience to the precept can confound the truth.” Dupuis v. Hand, 814 S.W.2d 340, 346
(Tenn. 1991). The Grossman’s test has a sound foundation and is a proper application of bankruptcy
principles. Second, the rule of retroactivity stated by the U.S. Supreme Court in Harper clearly supports the
application of Grossman’s rather than Frenville in the instant matter.
11
process in Tennessee because Mrs. Nye’s claims against these manufacturers arose before
the filing of their bankruptcy cases.
We now shift our analysis to the other two manufacturers – Raybestos and Johns
Manville. The plans of reorganization for Raybestos and Johns Manville had been confirmed
by the Bankruptcy Court before Mrs. Nye filed her complaint.11 As a general
matter, confirmation of the plan of reorganization ends the automatic stay, re-vests the
property of the estate in the debtor, and, pursuant to 11 U.S.C. § 1141(d),12 simultaneously
discharges the debtor. In re Draggoo Elec. Co., 57 B.R. 916, 919 (Bankr. N.D. Ind.
1986). Once this occurs, the automatic stay provision is no longer effective and service of
process against the debtor is not prohibited by section 362. Nevertheless, these
manufacturers were still shielded from service of process in Tennessee courts under the terms
of specific injunctions set forth in their confirmed plans of reorganization.
Johns Manville was the first of the two manufacturers to have its plan
confirmed. Johns Manville’s bankruptcy was precipitated, not by that company’s inability
to meet its present debts, but by its anticipation of future asbestos-related tort causes of action
by parties who had been exposed to Johns Manville’s asbestos-containing products before
it filed bankruptcy but who would not manifest symptoms of asbestos-related disease during
the pendency of the bankruptcy proceedings.13 Kane v. Johns-Manville Corp., 843 F.2d 636,
639 (2d Cir. 1988). Confirmation of a plan of reorganization generally discharges the debtor
from pre-confirmation debts, 11 U.S.C. § 1141(d)(1), but discharge of a claim may be
precluded on due process grounds if the claimant has not been given adequate notice that he
or she has a claim in bankruptcy. See Grossman’s, 607 F.3d at 125-26. This would apply
11
Johns Manville’s plan was confirmed in December of 1986; and Raybestos’ plan was confirmed
in August of 2000.
12
Section 1141 under Chapter 11 of the Bankruptcy Code provides in pertinent part that “[e]xcept
as otherwise provided in this subsection, in the plan, or in the order confirming the plan, the confirmation
of a plan . . . discharges the debtor from any debt that arose before the date of such confirmation. . . .” 11
U.S.C. § 1141(d)(1)(A) (2006 & Supp. 2010).
13
In the years following Johns Manville’s bankruptcy, there was a steady increase in the number of
actual and potential claimants. As of January 31, 1996, approximately 285,600 claims had been filed with
estimates of the total projected number of claims that would eventually be filed as high as 600,000 and with
estimates for total claims liability in excess of 22 billion dollars. Frank J. Macchiarola, The Manville
Personal Injury Settlement Trust: Lessons for the Future, 17 Cardozo L. Rev. 583, 598 (1996). A
Rand Corporation report published last year reflects that as of September 30, 2009, 817,264 claims
had been filed. Lloyd Dixon, Geoffrey McGovern & Amy Coombe, Asbestos Bankruptcy Trusts: An
Overview of Trust Structure and Activity with Detailed Reports on the Largest Trusts, 128 n. 6 (2010).
http://www.rand.org/publications.html.
12
to claimants whose injuries were not manifested as of the time of confirmation. Anticipating
this due process problem, Johns Manville addressed it in its reorganization plan. Kane, 843
F.2d at 640. In an effort to satisfy the claims of all present and future asbestos exposure
victims and allow Johns Manville to maximize its value as it continued its business
operations, the confirmed plan of reorganization provided for the creation of a trust against
which all such claimants could proceed to satisfy their claims through either settlement,
mediation, arbitration, or tort litigation. Id. To ensure Johns Manville’s protection from
future massive personal injury lawsuits that could prevent its successful reorganization, the
bankruptcy court issued a “channeling injunction” as a pre-condition to confirmation of the
plan. Id. This channeling injunction provided that present and future asbestos claimants
were prohibited from suing Johns Manville and could only proceed against the asbestos
claims trust. Id.
Congress, inspired by the strategy employed by the architects of Johns Manville’s
reorganization, enacted section 524(g) of the Bankruptcy Code as part of the Bankruptcy
Reform Act of 1994 to address the asbestos claims problem on a national basis. See
Grossman’s, 607 F.3d at 126. Section 524(g) provides that if the following pre-conditions
have been met, the bankruptcy court may issue an injunction to supplement the injunctive
effect of discharge:
1) a trust is established which assumes the present and future
asbestos personal injury and property damage liabilities of the
debtor;
2) the trust is funded in whole or part by securities of the debtor
and obligations of the debtor to make future payments, including
dividends;
3) the trust will own, or by exercise of rights granted under the
plan will be entitled to own, a majority of the voting stock of the
debtor, parent or subsidiary, if specified contingencies occur;
4) the trust will pay the present and future asbestos claims
against the debtor;
5) the present and future claims will all be valued and paid in
substantially the same manner;
6) the plan is approved by at least 75 percent of all asbestos
claimants who vote; and
7) a futures representative is appointed.
11 U.S.C. § 524(g)(2)(B) (2006). If issued, the channeling injunction would enjoin entities
from taking legal action for the purposes of directly or indirectly collecting, recovering, or
receiving payment or recovery with respect to any asbestos-related claim or demand that,
13
under the confirmed plan of reorganization, is to be paid in whole or in part by the asbestos
personal injury trust established as a pre-condition to the injunction.
The confirmed Chapter 11 plans of reorganization of Johns Manville and Raybestos
contained channeling injunctions. Therefore, suit by Mrs. Nye against these manufacturers
was prohibited and for that reason, neither of them was subject to service of process in the
courts of this state at the time the Nye complaint was filed.14
In summary, we conclude that Mrs. Nye has presented proof establishing the first
element under Tennessee Code Annotated section 29-28-106(b), that Owens Corning,
Pittsburgh Corning, Raybestos, and Johns Manville are not subject to service of process in
the state of Tennessee. Therefore, Mrs. Nye can pursue a strict liability action against North
Brothers as to injuries allegedly sustained as the result of her husband’s exposure to products
of those manufacturers that North Brothers sold to Dupont.
Jury Instructions
Learned Intermediary Instruction
Next, we review a portion of the trial court’s instructions to the jury. Whether a jury
instruction is erroneous is a question of law and is therefore subject to de novo review with
no presumption of correctness. Solomon v. First Am. Bank of Nashville, 774 S.W.2d 935,
14
Tennessee Code Annotated section 29-28-106(b) was enacted in 1978 – eight years before the
creation of the first channeling trust by Johns Manville. The legislature could not have had channeling trusts
in mind when the statute was enacted, thus, the statute does not contemplate how a claim against a seller
should be handled when a channeling trust is involved. North Brothers argues that allowing Mrs. Nye’s strict
liability suit under the statute could result in double recovery given the availability of funds in the
manufacturers’ trusts. However, Mrs. Nye will not be fully compensated under any of the trusts. North
Brothers attached documentation as an exhibit to a response in opposition to a motion in limine indicating
that Mrs. Nye collected $26,250 from the Johns Manville trust in 2006 and that Mrs. Nye has filed a claim
against the Owens Corning trust. The Rand Corporation reports a current payout rate of 7.5% for the
scheduled value of a claim allowed under the Johns Manville trust and a 10% payout rate for the
scheduled value of a claim allowed under the Owens Corning trust, which will result in a payout of just
$21,500 on a Owens Corning mesothelioma claim. Lloyd Dixon, Geoffrey McGovern & Amy Coombe,
Asbestos Bankruptcy Trusts: An Overview of Trust Structure and Activity with Detailed Reports on the
Largest Trusts, 128, 146 (2010). http://www.rand.org/publications.html. Similarly, while there is no
evidence in the record as to whether Mrs. Nye has filed a claim against the Raybestos trust, Claims
Processing Facility, Inc., reports a mere 2% payout rate for an established claim accepted under the
Raybestos trust, resulting in an actual dollar amount of only $2,500 for a mesothelioma claim. Claims
Processing Facility, Inc., http://www.cpf-inc.com/raytech-trust/raytech-trust-faqs/ (last visited April 20,
2001). In any event, to the extent that implementation of the statute results in any double recovery, that is
a matter for legislative action and not properly addressed by the judiciary.
14
940 (Tenn. Ct. App. 1989). The legitimacy of a jury’s verdict is dependent on the accuracy
of the trial court’s instructions, which are the sole source of the legal principles required for
the jury’s deliberations. Therefore, a trial court is under a duty to impart “substantially
accurate instructions concerning the law applicable to the matters at issue.” Hensley v. CSX
Transp., Inc., 310 S.W.3d 824, 833 (Tenn. Ct. App. 2009) (quoting Bara v. Clarksville
Mem’l Health Sys., Inc., 104 S.W.3d 1, 3-4 (Tenn. Ct. App. 2002)). When considering
whether a trial court committed prejudicial error in a jury instruction, it is our duty to review
the charge in its entirety and consider it as a whole, and the instruction will not be invalidated
if it “fairly defines the legal issues involved in the case and does not mislead the jury.” Otis
v. Cambridge Mut. Fire Ins. Co., 850 S.W.2d 439, 446 (Tenn. 1992). The judgment of a trial
court will not be set aside based on an erroneous jury instruction unless it appears that the
erroneous instruction more probably than not affected the judgment of the jury. Tenn. R.
App. P. 36(b); Gorman v. Earhart, 876 S.W.2d 832, 836 (Tenn. 1994).
The trial court’s instructions to the jury at issue are as follows:
A manufacturer or a seller cannot be held liable for
failure to warn if you find that the consumer, DuPont, was
already aware of any danger in connection with the use of
asbestos-containing products, or if you find that adequate
warnings were given by manufacturers or sellers to DuPont.
...
In addition, if you find that DuPont failed to provide a
safe workplace for Hugh Todd Nye and that this failure was the
sole cause of damage to him, then you have found DuPont was
the sole cause of his injury, and you may not consider the fault
of North Brothers or any other company supplying asbestos-
containing materials to DuPont.
The jury’s spokesperson sought clarification of the charges as follows:
Well, if we find that the product was defective and
because of it being defective and everyone knew about it being
defective and it was still manufactured and sold as a defective
product, that’s where we have trouble with this paragraph as far
as the manufacturer or the seller cannot be liable for failure to
warn if they find the consumer, DuPont, was already aware of
15
any danger. So, you know, there’s enough evidence that showed
that DuPont knew of all the danger but so did everyone else.
I guess where we are kind of stuck at the point that we
are stuck at is that I think we all feel the product was defective
because of the danger of the product itself. So because of that
and because of this paragraph here as far as the manufacturer
and seller cannot be held liable for failure to warn, they kind of
to us kind of contradicts each other.
Subsequently, the trial court sent a note to the jury, stating as follows:
Let me preface this note by reminding you to consider all of the
charge and not single out some and ignore the others. Let me
say that all parts of the charge are equally important.
In determining whether DuPont was the sole cause of Mr. Nye’s
injury you should consider what DuPont knew compared with
the knowledge of all others.
In determining whether there was a failure to warn you should
consider what DuPont knew compared with the knowledge of all
others.
Specifically, Mrs. Nye contends this instruction is erroneous because it is based on the
“learned intermediary” doctrine15 which has not been adopted in Tennessee for products
liability cases, except cases involving pharmaceuticals and medical products. Mrs. Nye
argues that this instruction allows the jury to absolve North Brothers of liability merely upon
15
The learned intermediary doctrine is sometimes referred to as “the sophisticated purchaser
doctrine.”
Although there may be shades of difference between [‘the learned
intermediary rule’ and ‘the sophisticated purchaser rule’] as they are
applied by courts, the fundamental tenet is that a manufacturer should be
allowed to rely upon certain knowledgeable individuals to whom it sells a
product to convey to the ultimate users warnings regarding any dangers
associated with the product.
In re TMJ Implants Prods. Liab. Litig., 872 F. Supp. 1019, 1029 (D. Minn. 1995).
16
a finding that DuPont knew about the risks of the asbestos-containing products purchased
from North Brothers.
This issue requires us to review the propriety of the learned intermediary
doctrine. This doctrine, which allows a seller in a failure to warn case to rely on an
intermediary to convey warnings about a dangerous product, derives from section 388 of the
Restatement (Second) of Torts (1965).16 Comment n to section 388 provides that when a
seller sells a product to an intermediary, the seller may rely on the intermediary to provide
warnings to the user of the product if such reliance is reasonable under the
circumstances. Although section 388 addresses a supplier’s duty to warn under the law of
negligence, courts also apply its principles to the duty to warn in strict liability. See, e.g.,
Ackermann v. Wyeth Pharm., 526 F.3d 203, 208 n.5 (5th Cir. 2008); Smith v. Walter C. Best,
Inc., 927 F.2d 736, 741-42 (3d Cir. 1990); Bradco Oil & Gas Co. v. Youngstown Sheet &
Tube Co., 532 F.2d 501, 504 (5th Cir. 1976); Ebel v. Eli Lilly & Co., 536 F. Supp. 2d 767, 773
(S.D. Tex. 2008); Higgins v. E.I. DuPont de Nemours & Co., 671 F. Supp. 1055, 1059-60
(D. Md. 1987).
Traditionally, the learned intermediary doctrine has been applied to warnings related
to prescription drugs. See Victor E. Schwartz & Christopher E. Appel, Effective
Communication of Warnings in the Workplace: Avoiding Injuries in Working with Industrial
Materials, 73 Mo. L. Rev. 1, 22 (2008). The doctrine constitutes a defense by pharmaceutical
manufacturers in cases where a plaintiff has suffered injury from a medication prescribed by
a doctor. Physicians, who play a pivotal role in the distribution of prescription drugs, are the
intermediaries relied on by manufacturers to give warnings to patients. A majority of
jurisdictions, including Tennessee, recognize that a pharmaceutical manufacturer can
16
Restatement (Second) of Torts § 388 provides as follows:
Chattel Known to be Dangerous for Intended Use.
One who supplies directly or through a third person a chattel for
another to use is subject to liability to those whom the supplier should
expect to use the chattel with the consent of the other or to be endangered
by its probable use, for physical harm caused by the use of the chattel in the
manner for which and by a person for whose use it is supplied, if the
supplier
(a) knows or has reason to know that the chattel is or is likely
to be dangerous for the use for which it is supplied, and
(b) has no reason to believe that those for whose use the chattel
is supplied will realize its dangerous condition, and
(c) fails to exercise reasonable care to inform them of its
dangerous condition or of the facts which make it likely to be dangerous.
17
discharge its duty to warn by providing the physician with adequate warnings of the drug’s
risks. Pittman v. Upjohn Co., 890 S.W.2d 425, 429 (Tenn. 1994). In Tennessee, the learned
intermediary doctrine is applicable in failure to warn suits where a physician is the
intermediary between a defendant pharmaceutical or other medical product manufacturer and
an injured patient. See id.; King v. Danek Med., Inc., 37 S.W.3d 429, 452-53 (Tenn. Ct.
App. 2000); Harden v. Danek Med., Inc., 985 S.W.2d 449, 451 (Tenn. Ct. App. 1998).
North Brothers, relying on Ford Motor Co. v. Wagoner, 192 S.W.2d 840 (Tenn. 1946)
and Whitehead v. Dycho Co., 775 S.W.2d 593 (Tenn. 1989), argues that the learned
intermediary doctrine applies not just to pharmaceutical or other medical product cases, but
to other product liability cases. North Brothers’ reliance, however, is misplaced because this
Court has not expanded the application of the learned intermediary doctrine beyond the
pharmaceutical or medical arena.
In Wagoner, a particular model of one of Ford’s automobiles was marketed with a
defective hood latch such that when the car was subjected to a severe jolt, the hood would
spring up and obscure the driver’s vision. 192 S.W.2d at 841. When Ford discovered the
defect, it distributed an auxiliary catch to all of its dealers with instructions to install the catch
to remedy the defect. Id. The car in question was sold by one agency to another and then by
the second agency to one of its salesmen. Id. The catches were received by the second
agency while the salesman owned the car, and he was informed about and offered one of the
precautionary catches. Id. at 841-42. He regarded the catch as unnecessary and rejected
it. Id. at 842. Subsequently, the salesman sold the car to another party, whose guest, the
plaintiff, was injured while driving the car when the hood sprang up and caused an
accident. Id. Ford argued that the salesman’s independent and intervening act in failing to
make use of the catch and in neglecting to advise his vendee about the catch broke the causal
chain and was the proximate cause of the accident, not Ford’s negligence. Id. The
determinative issue, as noted by this Court, was whether the evidence established that the
salesman, as an intermediary vendor, was put on such notice of the defect and the remedy “as
to bring into play the rule which fastens the charge of conscious intervening negligence upon
an intermediate vendor and relieves the manufacturer of liability.” Id. at 842 (emphasis in
original). This Court stated that under this rule the continuing liability of a manufacturer
such as Ford to successive purchasers is “subject to be[ing] destroyed . . . by the intervening
act of an agency which is (1) independent, (2) efficient, (3) conscious and (4) not reasonably
to have been anticipated.” Id. at 844. This Court did not adopt the learned intermediary
doctrine in Wagoner, but rather applied the intervening cause doctrine. These are two
separate and distinct doctrines; the application of the former does not indicate an adoption
of the latter.
18
The learned intermediary doctrine was likewise not adopted in Whitehead, 775
S.W.2d 593. In Whitehead, Magnavox purchased naphtha, a combustible solvent used for
cleaning purposes, from two distributors. Naptha was distributed to Magnavox by transport
truck or in 55-gallon drums. Id. The trucks and drums displayed warnings that naptha was
either flammable or combustible, and Magnavox was aware that naptha was highly
flammable and should not be exposed to heat or sparks due to the possibility of explosion or
fire. Id. Magnavox transferred naptha from the drums that carried the distributors’ warning
labels to smaller, pump-type containers without warnings and provided these containers to
its employees for use in cleaning glue from their work aprons. Id. The plaintiff, an employee
of Magnavox, had not been advised of naptha’s dangerous propensities. Id. at 596. Unaware
of naptha’s dangerous propensities, the plaintiff took a can of it home to clean her apron as
she was allowed to do by Magnavox. Id. When she attempted to use the naptha in her
washing machine, an explosion resulted, and she was severely injured. Id. The plaintiff sued
the distributers of naptha in strict liability and alleged that the product was defective,
unreasonably dangerous, and sold without sufficient warnings of its dangerous qualities. Id.
at 594.
The trial court granted summary judgment to the distributors, in part upon the ground
that Magnavox was a learned intermediary and therefore the distributors could reasonably
rely on Magnavox to warn its employees about naptha’s danger and instruct them in its
use. Id. at 596. The court of appeals reversed the grant of summary judgment, noting that
“[t]he majority view and the view that this Court deems to be the better one is that the
manufacturer’s duty to warn extends to the employee-user as well as the employer-
purchaser.” Whitehead v. Dycho Co., No. 6935, 1987 WL 27044 at *8 (Tenn. Ct. App. Dec.
11, 1987) (citations omitted). Neither rejecting nor adopting the learned intermediary
doctrine in the employer-employee context, the intermediate court determined that the
plaintiff was entitled to a jury trial as to the adequacy of warnings given and whether the
distributors’ duty to give warnings extended to her. We reversed the intermediate court in
Whitehead and affirmed the trial court’s grant of summary judgment. Whitehead, 775
S.W.2d at 598. We noted that one of the reasons relied on by the trial court for its grant of
summary judgment was a finding that “Magnavox was a learned intermediary and the
defendants could reasonably rely upon Magnavox to warn its employees of the dangers of
naptha and to instruct them in its use.” Id. (emphasis added). In affirming the trial court’s
grant of summary judgment, we carefully noted that the reason for our decision was different
from the reasons underlying the trial court’s opinion. Id. at 598. Our ruling was based on
a finding that “the causal connection was broken by the independent intervening acts of
Magnavox in failing to place warnings on containers for use by its employees and in failing
to warn Plaintiff of the dangerous propensities of naptha.” Id. at 599. We concluded that the
plaintiff had failed to present evidence that she would not have sustained her injuries had the
distributors provided proper warnings, noting that the plaintiff never saw the drums in which
19
the distributors transported naptha to Magnavox and had there been inadequate warnings on
the drums, that would not have been the proximate cause of the accident. Id. We further
observed that Magnavox “was the only party in a position to issue an effective warning to
the Plaintiff,” stating that the distributors “had no reasonable access to the Plaintiff.” Id. at
600. While Whitehead digressed into a discussion of the reasonableness of the distributors’
reliance on Magnavox to convey warnings, it is clear that as in Wagoner, the holding was
based on the intervening cause doctrine, not the learned intermediary doctrine. This Court
was presented with an opportunity to affirm the trial court by specifically applying the
learned intermediary doctrine, but did not do so.
Tennessee courts have not previously applied the learned intermediary doctrine to
product liability actions arising in the workplace, and we do not find it appropriate to do so
now.17 The rationale for the doctrine limits its application to the unique circumstances of the
medical arena where a physician seeks to find the optimal treatment for a particular patient,
as indicated in the following discussion of that rationale as it pertains to prescription drugs:
We cannot quarrel with the general proposition that where
prescription drugs are concerned, the manufacturer’s duty to
warn is limited to an obligation to advise the
prescribing physician of any potential dangers that may result
from the drug’s use. This special standard for prescription drugs
is an understandable exception to the Restatement’s general rule
that one who markets goods must warn foreseeable ultimate
users of dangers inherent in his products. Prescription drugs are
likely to be complex medicines, esoteric in formula and varied
in effect. As a medical expert, the prescribing physician can
take into account the propensities of the drug as well as the
susceptibilities of his patient. His is the task of weighing the
benefits of any medication against its potential dangers. The
17
In support of its argument that this state has adopted the learned intermediary doctrine with respect
to non-medical cases, North Brothers cites a Sixth Circuit case, Jacobs v. E.I. DuPont De Nemours & Co.,
67 F.3d 1219, 1244-45 (6th Cir. 1995) and three Tennessee federal district court cases, Davis v. Komatsu
Am. Indus. Corp., 46 F. Supp. 2d 745, 754 (W.D. Tenn. 1999); Byrd v. Brush Wellman, Inc., 753 F. Supp.
1403 (E.D. Tenn. 1990); and Travelers Indem. Co. v. Indus. Paper & Packaging Corp., No.3:02-CV-491,
2006 WL 2050686 (E.D. Tenn. July 19, 2006). To the extent that these cases conclude that this Court has
adopted the learned intermediary doctrine outside of the medical arena, they are incorrect. Our refusal to
adopt the learned intermediary doctrine in Whitehead was properly recognized by the United States District
Court for the District of Minnesota in TMJ Implants Products Liability Litigation, 872 F. Supp. 1019, 1031
(D. Minn. 1995) (“The Supreme Court of Tennessee specifically declined to either accept or reject the . . .
learned intermediary doctrine[ ] in Whitehead.”).
20
choice he makes is an informed one, and individualized medical
judgment bottomed on a knowledge of both patient and
palliative.
Dooley v. Everett, 805 S.W.2d 380, 386 (Tenn. Ct. App. 1990) (quoting Stone v. Smith,
Kline & French Labs., 731 F.2d 1575, 1579-80 (11th Cir. 1984)) (emphasis in original)
(citations omitted). In Hall v. Ashland Oil Co., 625 F. Supp. 1515 (D. Conn. 1986), the
district court of Connecticut set forth various distinctions between an industrial employer
utilizing a hazardous substance, such as benzene, and a doctor prescribing medication:
First, unlike the doctor, whose primary purpose in selecting a
drug is to promote the well-being of the ultimate user, the
industrial purchaser’s basic interest in selecting a chemical
solvent is the overall utility of that solvent in its manufacturing
processes. While avoiding health risks to its employees is a
consideration that goes into choosing one chemical over another,
it is not the employer’s sole concern, or even its primary
focus. Second, there is no guarantee that the ordinary industrial
employer is an expert on health risks. A chemical company may
be in a position to act as an expert concerning the industrial uses
and disadvantages of a chemical and yet not have the capacity
to serve adequately as a learned intermediary concerning
medical risks associated with the chemical. Third, the
marketing system for industrial chemicals differs from that of
prescription drugs – benzene and other chemicals are not
subject to the strict limitations on availability that apply to
drugs. . . . Fourth, the relationship of doctor and patient is a
one-on-one relationship where the doctor assesses the individual
needs of each patient. . . . Even an employer who is aware of
direct effects of the chemical may be unaware of more subtle or
diffuse risks. Finally, the prescription drug cases, in relieving
manufacturers of the duty to warn drug users, shift that duty on
to a party who can be held legally liable to the patient for failing
to fulfill it. This powerful incentive is limited by the exclusive
remedy provisions of the workman’s compensation statutes.
Id. at 1519-20.
Comment n of section 388 of the Restatement acknowledges that the duty to warn of
hazards associated with the use of a product increases with the amount of danger involved. It
21
is established that asbestos is an extremely dangerous substance and that unprotected
exposure to respirable asbestos fibers over a period of time may well result in death. Given
the highly hazardous nature of asbestos, the dire consequences to the unwarned consumer,
and the important distinctions between the use of asbestos by an employer in industry and the
use of pharmaceuticals and medical devices by a doctor in treating his or her patient, we find
good reason not to extend the learned intermediary doctrine to products liability cases where
an employee claims damages for injuries from a product containing asbestos or some other
highly toxic substance purchased by the employer and used by the employee during the
course of his or her employment.
Causation
Finally, North Brothers argues that even if the learned intermediary doctrine is not
extended to this case, the trial court’s instruction was still correct because it accurately
reflects the law of causation in Tennessee and properly allowed the jury to find that DuPont
was the sole cause in fact of Mr. Nye’s injuries.
Causation, an essential element of any products liability action, refers to both
“proximate cause” and “cause in fact.” This Court has noted the distinction between these
two terms as follows:
Cause in fact refers to the cause and effect relationship between
the defendant’s tortious conduct and the plaintiff’s injury or
loss. Thus, cause in fact deals with the “but for” consequences
of an act. The defendant’s conduct is a cause of the event if the
event would not have occurred but for that conduct. In contrast,
proximate cause, or legal cause, concerns a determination of
whether legal liability should be imposed where cause in fact
has been established. Proximate or legal cause is a policy
decision made by the legislature or the courts to deny liability
for otherwise actionable conduct based on considerations of
logic, common sense, policy, precedent and “our more or less
inadequately expressed ideas of what justice demands or of what
is administratively possible and convenient.”
Snyder v. LTG Lufttechnische GmbH, 955 S.W.2d 252, 256 n. 6 (Tenn. 1997) (citations
omitted). To enable a jury to determine whether an employer’s actions may have been the
cause in fact of the plaintiff’s injury, evidence showing what happened to the product leading
up to the plaintiff’s injury must be permitted. Otherwise, the manufacturer or seller will be
effectively precluded from the defense that the product was not defective when it left the
22
manufacturer’s or seller’s control. Snyder, 955 S.W.2d at 256. As we also noted in Snyder,
if the rule were different, “the defendant[] would be restricted from presenting evidence that
the plaintiff’s employer altered, changed, or improperly maintained the [product].” Id. n. 7.
It was proper for the jury to consider the actions of DuPont in determining whether
DuPont was the cause in fact of Mr. Nye’s injuries. However, it does not follow that it was
also proper to instruct the jury that if DuPont was aware of any dangers in connection with
the use of the products it purchased from North Brothers, North Brothers could not be held
liable for failure to warn. In support of its argument that DuPont’s knowledge of the
products’ dangers absolves North Brothers of liability, North Brothers quotes the following
language from Harden, relied on by the trial court in formulating the instruction at issue:
[A] manufacturer will be absolved of liability for failure to warn
for lack of causation where the consumer was already aware of
the danger, because the failure to warn cannot be the proximate
cause of the user’s injury if the user had actual knowledge of the
hazards in question.
Harden, 985 S.W.2d at 451(quoting 63A Am.Jur.2d Products Liability, § 1162 (1984))
(emphasis added). In relying on Harden, North Brothers mistakenly, as did the trial court in
its jury instruction, identifies DuPont, rather than Mr. Nye, as the consumer in the instant
matter. The Harden court indicated that, for purposes of the learned intermediary doctrine,
the physician stands in the place that the consumer would otherwise occupy as the party to
whom a duty to warn is owed:
Under [the learned intermediary doctrine], physicians are the
“consumers” who must be warned. Thus, it is generally held
that the learned intermediary doctrine may shield a manufacturer
from liability when the physician was independently aware of
the risks involved.
Id. We construe the court’s language applying the term “consumer” to the intermediary
physician to mean that the physician, in effect, replaces the party to whom the duty to warn
is owed. This is not to say that the physician is the consumer in the strict sense. The patient
remains the consumer or user. It is still the patient, not the doctor, who is ingesting the
pharmaceutical or into whose body the medical device is implanted.
The learned intermediary doctrine does not apply in this case, and Mr. Nye, not
DuPont, was the consumer. This conclusion is supported by the language of the Tennessee
Products Liability Act, which distinguishes the employee/consumer from the employer by
23
defining “[e]mployer” to mean “any person exercising legal supervisory control or guidance
of users or consumers of products.” Tenn. Code Ann. § 29-28-102 (3). It is also supported
by comment l to § 402A of the Restatement (Second) of Torts (1965) stating that
‘User’ includes those who are passively enjoying the benefit of
the product, as in the case of passengers in automobiles or
airplanes, as well as those who are utilizing it for the purposes
of doing work upon it, as in the case of an employee of the
ultimate buyer who is making repairs upon the automobile
which he has purchased.
(Emphasis added).
DuPont’s knowledge of the danger of asbestos did not make DuPont the sole cause
in fact of Mr. Nye’s injuries. Rather, based on their knowledge of the dangers of the
asbestos-containing products, it may be shown that both DuPont and North Brothers were
the causes in fact of Mr. Nye’s injuries as a result of their failure to warn him of the products’
dangers. North Brothers disputes this and contends that it cannot be the cause in fact of Mr
Nye’s injury for two reasons. First, North Brothers argues that if DuPont had not purchased
the asbestos-containing products North Brothers supplied DuPont, “DuPont would have
bought them from another source.” Second, North Brothers notes that Mr. Nye admitted in
deposition testimony that he never saw the boxes that were used by North Brothers to ship
its products to DuPont. North Brothers argues that Mr. Nye would never have seen any
warnings on the boxes even if they had been there. Both arguments are without merit. As
to the first argument, DuPont did purchase asbestos-containing products from North
Brothers, and it is irrelevant what DuPont would have done had it not purchased the products
from North Brothers. As to the second argument, North Brothers could have availed itself
of alternative means of effectively warning Mr. Nye and other DuPont employees of the
dangers of the products it sold DuPont and was not limited to placing a warning on boxes
that were not visible to such employees. For example, warnings might have been printed
directly on the products or, if that was not feasible, North Brothers could have provided
employees warning pamphlets or conducted joint information sessions with DuPont to alert
employees to the dangers associated with the products. See Whitehead v. St. Joe Lead Co.,
729 F.2d 238, 247 (3d Cir. 1984).
In summary, we hold that the learned intermediary doctrine is not applicable under the
circumstances of this case. The trial court’s jury instruction based on that doctrine, absolving
North Brothers of liability for Mr. Nye’s injury upon a finding that DuPont was already
aware of the dangers of the asbestos-containing products or that adequate warnings were
given to DuPont of such dangers, was erroneous and was not otherwise proper under the law
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of causation. It is further apparent that this error in the instruction more probably than not
affected the judgment of the jury. Accordingly, we find that the jury instruction was
reversible error.
Conclusion
For the reasons stated, we hold that, pursuant to Tennessee Code Annotated section
29-28-106(b), North Brothers is subject to suit on strict liability grounds for injuries allegedly
sustained by Mr. Nye as a result of his exposure to the asbestos-containing products that
North Brothers supplied to DuPont. We further hold that the trial court committed harmful
error in adopting the learned intermediary doctrine in its instruction to the jury. Accordingly,
we affirm the judgment of the Court of Appeals. The judgment of the trial court is reversed,
and the case is remanded for a new trial. Costs are assessed to the appellant, National
Service Industries, Inc., f/k/a/ North Brothers, Inc., and its surety, for which execution may
issue if necessary.
___________________________
SHARON G. LEE, JUSTICE
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