On June 11, 2019, in the Matter of Eighth Jud. Dist. Asbestos Litig., (___NY3d___, 2019 NY Slip Op 04640, ) New York State’s highest court, reversed the decision of the intermediate appellate court and reinstated an order of the trial Court denying a defendant’s motion for summary judgment. The motion had been granted on appeal under a theory that its coke ovens should not be considered “products” in the context of a New York products liability lawsuit. Coke ovens are used to heat coal to create coke.Coke, in turn, is used in the steel industry as fuel.Coke ovens tend to be fairly large and are a specialized piece of equipment.In this particular instance, they were large brick ovens built into a massive multi-story “battery” structure.
The estate of a deceased coke oven worker brought a failure to warn suit against the manufacturer of the coke ovens used at the Bethlehem Steel Lackawanna plant in the Buffalo, New York area.Necessarily, the estate took the position that the coke ovens were “products” under New York Law. “In New York, a product is considered ‘defective,’ and the manufacturer liable, if the product: (1) ‘contains a manufacturing flaw,’ (2) ‘is defectively designed,’ or (3) ‘is not accompanied by adequate warnings for the use of the product’” (Matter of Eighth Jud. Dist. Asbestos Litig., ___NY3d___, 2019 NY Slip Op 04640,  citing Liriano v Hobart Corp., 92 NY2d 232, 237, ).In the case at issue, it was alleged that the decedent had been exposed to years of hazardous emissions from the ovens resulting in cancer and death.The estate essentially argued the ovens should have borne adequate warnings of the risks associated with their use.They bore no such warnings.
The successor company of the manufacturer of the coke ovens filed a motion for summary judgment. As the movant, the manufacturer had the burden of establishing that the coke ovens were not “products” but failed to do so, according to the Court of Appeals. The manufacturer argued that the coke ovens at the plant were not, in fact, “products” under New York law and thus, that strict products liability and a duty to warn did not apply to the manufacturer. Specifically, the manufacturer focused on the fact that the ovens were built along with the structure at the Lackawanna plant and could not function on their own.The manufacturer argued that the ovens were not “installed” and that the ovens were constructed to the specifications of Bethlehem Steel. The manufacturer essentially took the position that it was an advisor or general contractor to Bethlehem Steel, rather than a fabricator of products.
At the trial Court level, the New York State Supreme Court, County of Erie, denied the manufacturer’s motion. On appeal, the Supreme Court Appellate Division, Fourth Department reversed. The Court of Appeals then reversed the Appellate Division and remanded the case for trial.
The Court of Appeals reasoned in the decision that the manufacturer had exercised sufficient control over the manner in which, the ovens at the Lackawanna plant were designed, built, and installed to deem them products for purposes of the suit.This was despite the fact that the Bethlehem Steel company had played a significant role in the design of the ovens at its plant. The Court of Appeals held that contrary to the arguments of the manufacturer of the ovens, it was not merely in an advisory role.Rather, it was engaged in the manufacture of products that were sold nationwide with the common purpose of making coke. That the ovens at the Bethlehem Steel plant were of a size and quantity specific to the particular plant was of no moment as the manufacturer was in the business of designing and building such ovens nationwide.
In addition to analyzing the design and construction process, the Court of Appeals held that the manufacturer was responsible for placing the ovens into the chain of commerce and was also in the best position to assess the safety and suitability of the ovens for their intended purpose because it had special knowledge about the ovens and their respective purposes. The Court reiterated that public policy supports determining that the coke ovens were a “product” and that there is no concrete definition of what makes a thing a “product.” Rather, the courts will evaluate the facts of each contrivance and the public policy implications for imposing liability, and then determine whether liability will lie.The case was remanded for trial, which is scheduled for 2020.
In a well-reasoned dissent, Associate Judge of the Court of Appeals, Leslie Stein, took the position that the unique relationship of Bethlehem Steel to the manufacturer of the coke ovens, coupled with the limited, non-mass-produced nature of the ovens, and the fact that coke ovens cannot work without being part of a battery, supported the theory that the ovens were not “products.” Rather, Judge Stein took the position that the coke ovens were more akin to improvements to real property that are usually not considered products.She reasoned that because coke ovens were only sold to a select number of sophisticated steel companies, they did not implicate the public policy concerns brought about by mass-production.Also, she indicated that Bethlehem Steel had sufficient knowledge of the risks posed by coke ovens.
This case is significant in that it may be the harbinger of expanded liability for general contractors that engaged in making improvements to real property at steel and other large plants, whether the improvements were mass-produced or tailored to the individual plant. Defendants facing lawsuits under such circumstances should focus on the reasoning in the dissent of Judge Stein and draw distinctions between their activities and those of the coke manufacturer in this recent decision.