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Lambert v. B.P. Products North America

April 5, 2006

CHESTER D. LAMBERT, JR., AND DONNA FAYE LAMBERT, PLAINTIFFS,
v.
B.P. PRODUCTS NORTH AMERICA, INC., CONOCO PHILLIPS COMPANY, SHELL OIL COMPANY, ASHLAND OIL, INC., EXXON MOBIL OIL CORPORATION, ATLANTIC RICHFIELD COMPANY A/K/A ) ARCO PRODUCTS COMPANY, AND MAYTAG AIRCRAFT CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Murphy, Chief District Judge

MEMORANDUM AND ORDER

This matter is before the Court on a motion for summary judgment brought by Defendant Shell Oil Company ("Shell"). For the following reasons, the motion is DENIED.

BACKGROUND

Plaintiff Chester Lambert, Jr., served in the United States Marine Corps as a jet engine mechanic from 1971 to 1989. From January 1, 1983, to April 4, 1989, Mr. Lambert was stationed in Yuma, Arizona, where in the course of his employment he was frequently exposed to JP-4 jet fuel manufactured by Shell. In May 2003 Mr. Lambert was diagnosed with chronic lymphocytic leukemia. The Department of Veterans Affairs found Mr. Lambert's leukemia to be service-related.

Mr. Lambert and his wife filed this lawsuit in Illinois state court, alleging that Mr. Lambert's leukemia is the result of exposure to excessive levels of benzene in JP-4. The Lamberts' complaint asserts claims against Shell for defective manufacture and failure to warn that sound in negligence and strict products liability. The case was removed to this Court on the basis of so-called "federal enclave" jurisdiction, see 28 U.S.C. § 1331; Sinicki v. General Elec. Co., No. 1:05-CV-508, 2005 WL 1592961, at *1 (N.D.N.Y. July 7, 2005), and so-called "federal officer" jurisdiction. See 28 U.S.C. § 1442.

Shell seeks summary judgment on four grounds. First, Shell contends that it discharged its duty to warn by sending a Material Safety Data Sheet ("MSDS") to the United States, a sophisticated purchaser of JP-4, in 1985 and 1988. Second, Shell contends that any purported failure to adequately warn in its 1985 and 1988 MSDS of the health hazards of its product was not the cause of Mr. Lambert's injuries because Mr. Lambert admits he never read any MSDS issued by Shell or any other product information about Shell's JP-4 fuel. Third, Shell argues that it is immune from liability under the "military contractor defense" because it produced JP-4 in conformity with detailed military specifications and warned the United States about the purported hazards of the product for those who were to come in contact with it. Finally, by way of its reply brief in support of its motion for summary judgment, Shell contends that Mr. Lambert has failed to show that he was exposed to JP-4 manufactured by Shell while he was stationed in Arizona.

DISCUSSION

A. Legal Standard

Summary judgment may be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). In considering a summary judgment motion, a court must review the entire record and draw all reasonable inferences in the light most favorable to the non-moving party. See NLFC, Inc. v. Devcom Mid-America, Inc., 45 F.3d 231, 234 (7th Cir. 1995); Enquip, Inc. v. Smith-McDonald Corp., 655 F.2d 115, 118 (7th Cir. 1981). On summary judgment a court may not make credibility determinations or weigh the evidence, because these are tasks for a factfinder. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Betaco, Inc. v. Cessna Aircraft Co., 32 F.3d 1126, 1138 (7th Cir. 1994). In evaluating a motion for summary judgment, "[t]he court has one task and one task only: to decide, based on the evidence of record, whether there is any material dispute of fact that requires a trial." Waldridge v. American Hoechst Corp., 24 F.3d 918, 920 (7th Cir. 1994).

B. The Sophisticated Purchaser Defense

The sophisticated purchaser defense to a failure-to-warn claim brought under negligence or strict liability theories provides that product suppliers do not have a duty to warn employees or customers of knowledgeable industrial purchasers as to product-related hazards. See Ritchie v. Glidden Co., 242 F.3d 713, 724 (7th Cir. 2001) (applying Indiana law). Put another way, suppliers have no duty to warn where the plaintiff's employer is a sophisticated user of the product and is in the best position to warn employees of the product's dangers; the supplier remains under a duty to warn end-users, but it can rely on a knowledgeable employer to convey the warnings of the hazard. See Restatement (Second) of Torts § 388 cmt. n (1965).

The parties are in agreement that the issue of the sophisticated purchaser defense vis-a-vis the Lamberts and Shell is controlled by Arizona law, because Arizona is where Mr. Lambert was exposed to benzene in JP-4 manufactured by Shell. As a matter of federal law, wrongful death or personal injury actions that arise in a national park or other place subject to the exclusive jurisdiction of the United States are governed by the law of the state in which the federal enclave is located. See 16 U.S.C. § 457.*fn1 In evaluating the applicability of the sophisticated purchaser defense, Arizona courts consider numerous factors, including, "[t]he likelihood or unlikelihood that harm will occur if the vendee does not pass on the warning to the ultimate user, the trivial or substantial nature of the probable harm, the probability or improbability that the particular vendee will not pass on the warning and the ease or burden of the giving of warning by the manufacturer to the ultimate user." Dole Food Co. v. North Carolina Foam Indus., Inc., 935 P.2d 876, 881 (Ariz. Ct. App. 1996) (quoting Shell Oil Co. v. Gutierrez, 581 P.2d 271, 278 (Ariz. Ct. App. 1978)).

Shell's invocation of the sophisticated purchaser defense relies on two premises: first, that the United States is per se a sophisticated purchaser and, second, that as a bulk supplier of JP-4, Shell could only have discharged its duty to warn by giving notice to the United States. The Court declines to hold that the United States is in every time and season a sophisticated purchaser.

Arizona law clearly contemplates resolution of the question of whether a given employer is a sophisticated purchaser through a fact-intensive, case-by-case inquiry. "It is obviously impossible to state in advance any set of rules which will automatically determine in all cases whether one supplying a chattel for the use of others through a third person has satisfied his duty to those who are to use the chattel by informing the third person of the dangerous character of the chattel, or of the precautions which must be exercised in using it in order to make its use safe." Shell Oil, 581 P.2d at 278 (quoting Restatement (Second) of Torts § 388 cmt. n).

Likewise, in Shell Oil the court specifically rejected the argument that Shell, by virtue of being a bulk supplier, automatically discharged its duty to warn by giving notice of a defect in a product to a plaintiff's employer. In Shell Oil, a welder was injured when an empty liquid xylene drum exploded. Shell, the manufacturer of the xylene, argued that, as a bulk supplier of xylene in carload lots without direct access to the packaging of its product in barrels, it could not reasonably be expected to give warning to end-users of the xylene. The court disagreed, saying, "Shell being a bulk supplier in carload lots and not having direct access to the barrels does not insulate it from liability. Labeling the container is but one of the methods which may give adequate warning. Lack of access to the final form in which the product reaches the user is simply one of the considerations bearing upon the existence and extent of duty." 581 P.2d at 279 (citation omitted).

The Court concludes that, in this instance, "[t]he determination as to whether the supplier's duty . . . has been reasonably discharge[d] comes within the function of the trier of fact." Shell Oil, 581 P.2d at 279. See also Dole Food, 935 P.2d at 881 ("Whether [the] manufacturer has discharged his duty, considering [the relevant] factors, is a question for the trier of fact."). The record shows that Shell did not warn the United States about the toxicity of benzene in Shell's JP-4 jet fuel until December 1985, nearly three years after Mr. Lambert began working with the product. The record shows also a question of fact as to the adequacy of the warning Shell gave to the United States in 1985. As the Lamberts' counsel points out, the MSDS Shell delivered to the United States in 1985 stated: "Repeated high level benzene exposure may produce injury of the blood-forming tissues causing blood abnormalities and possibly leukemia; however, exposures to such high levels are not likely to be encountered in JP-4 vapor due to the low benzene content." Pls.' Mem. Law Opp. Def. Shell's Mot. Summ. J., Ex. C. Notably, a later MSDS issued by Shell in 1988 concerning JP-4 substantially revised the language of the 1985 MSDS: "Prolonged and repeated benzene exposure may cause serious injury to blood forming organs: benzene is suspected of carcinogenic (leukemia) potential in man. Benzene is listed by the National Toxicology Program, the International Agency for Research on Cancer, and OSHA as a chemical causally associated with cancer in humans." Id., Ex. D.

Although Shell contends that the United States performed studies of the toxicity of benzene in JP-4, these studies are not part of the record, and any attempt by the Court to divine what the United States knew or did not know about the toxicity of JP-4 manufactured by Shell would amount to speculation. The fact that Mr. Lambert testified that he does not recall ever seeing an MSDS regarding Shell's JP-4 casts further doubt on the reasonableness of Shell's reliance on the United States to give warning to end-users of Shell's product. See Dole Food, 935 P.2d at 881-82 (in a strict products liability action by the owner of a building that was damaged when a welding spark ignited the building's insulation, finding a genuine issue of material fact precluding summary judgment for a polyurethane foam insulation supplier as to whether the supplier satisfied its duty to warn by giving warnings to a contractor who installed the supplier's insulation in the plaintiff's building, in light of evidence that the supplier made no effort to ensure that the contractor transmitted information regarding the insulation's hazards to the building owner). See also Taylor v. Monsanto Co., 150 F.3d 806, 808 (7th Cir. 1998) (applying Indiana law) ("In order for the [sophisticated purchaser] exception to apply . . . , the [purchaser] must have knowledge or sophistication equal to that of the manufacturer, and the manufacturer must be able to rely reasonably on the [purchaser] to warn the ultimate consumer."). Likewise, although Shell contends that as a bulk supplier it had no way of knowing the final destination of the JP-4 it supplied to the United States, Mr. Lambert specifically testified that Shell tanker trucks frequently visited the military base where he was stationed in Arizona, suggesting that Shell could have attempted to identify and warn potential end-users of its product, such as Mr. Lambert. See Dole Food, 935 P.2d at 881-82 (finding a genuine issue of material fact as to whether a supplier satisfied its duty to warn by giving warnings to a contractor, in light of evidence that the supplier's personal contact with ultimate consumers of the supplier's product was an available avenue of communication).

Finally, the Court notes that benzene is a carcinogen for which there is no known safe level of exposure. See Industrial Union Dep't, AFL-CIO v. American Petroleum Inst., 448 U.S. 607, 613 (1980); American Petroleum Inst. v. OSHA, 581 F.2d 493, 496 (5th Cir. 1978). Under the circumstances of this case, it is not for the Court to decide what sort of warnings were necessary to discharge Shell's duty to end-users of its JP-4. The Lamberts' counsel has pointed out various measures Shell might have taken to ensure adequate warning, and the Court will not add to that recitation. "[W]hether a manufacturer has adequately discharged its duty to warn to qualify for the sophisticated [purchaser] defense is a question for the trier of fact." Ritchie, 242 F.3d at 724 (citing Dole Food, 935 P.2d at 881). It is the province of the jury to decide what measures Shell could have or should have taken to protect end-users of its JP-4 fuel such as Mr. Lambert. Summary judgment as to Shell's sophisticated purchaser defense will be denied.

C. Mr. Lambert's Alleged Failure to Read Warnings

Shell contends also that the Lamberts cannot prove causation because Mr. Lambert admitted during a deposition that he never read Shell's MSDS regarding JP-4. Shell mischaracterizes Mr. Lambert's testimony. What Mr. Lambert actually testified to was that he never saw an MSDS for Shell's JP-4:

Q: . . . During the course of your military career were you ever taught about, or did you ever learn about the importance of having adequate ventilation in your work area?

A: Adequate ventilation? I don't recall ever seeing anything. If you are working with a chemical, a severe chemical, something like methyl ethyl ketone or something like that, something serious like that, I think it's written on the side of the can. But I don't recall ever having ...


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