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Many states have codified at least part of the state law regarding product liability, often based on a version of the Restatement of Torts. These statutes set forth who may recover and who is liable for a defective product. The South Carolina statute is based on the Second Restatement and provides for liability for injuries to the “ultimate user or consumer.” S.C. Code Ann. § 15-73-10. In Lawing v. Univar USA, Inc., the South Carolina Supreme Court recently considered when an employee qualifies as a “user” for the purposes of the state’s product liability statute and whether the sophisticated user defense is available in a case based on the inadequate labeling of a product.
Three employees of a manufacturing plant were severely injured in a fire that occurred while the plant was shut down for maintenance. The employees were using an oxyacetylene torch to cut some pipe when a piece of hot slag landed on or near a pallet of sodium bromate. The pallet erupted into a ball of fire. The three employees, along with the wife of one of them, filed suit against Univar USA, Inc., Trinity Manufacturing, Inc., and Matrix Outsourcing, LLC, all of whom were in the distribution chain for the sodium bromate purchased by the employer. The employer bought the sodium bromate from Univar, which sourced it through Trinity, which obtained it through Matrix from a Chinese manufacturer. The product was shipped from the manufacturer to the employer, and none of the defendants ever had it in its possession.
The lawsuits included claims for strict liability, negligence, and breach of the implied warranty of merchantability. One employee and his wife also had a breach of express warranty claim against Univar, as well as a loss of consortium claim for the wife against all of the defendants.
The sodium bromate was delivered to the employer in 25-kilogram woven plastic bags that were made of combustible material. The bags were delivered on pallets in shrink wrap. An employee responsible for receiving shipments testified that the pallets did not contain warnings that the pallets contained an oxidizer, nor were there warnings on the bags that were visible through the shrink wrap. There was an oxidizer symbol on one side of the bags, but some of the bags were turned with the other side facing up.
An expert testified that the labels met Department of Transportation requirements but did not meet OSHA requirements. The employee responsible for supervising the injured men testified that he noticed the pallets in the work area and checked to be sure that there was not an oxidizer symbol. He testified that he would have had the pallets moved before the work began.
Two of the injured employees also testified that they noticed the pallets but did not see a label marking the bags as dangerous. One of those employees also testified that he would have moved the bags if he had seen an oxidizer label. Although all three injured employees filed suit, two settled with Trinity and Matrix before trial.
The trial court granted summary judgment on the strict liability claims, finding that the plaintiff employee was not a “user” as required by South Carolina law. The trial court instructed the jury on the sophisticated user defense.
The jury ultimately found for the employee and his wife only on the express warranty claim. The other two plaintiffs settled with both Trinity and Matrix before trial, and Univar settled with all of the plaintiffs during the appeal. Thus, the appeals court only reviewed the appeal of the employee and his wife regarding the summary judgment on their strict liability claim and the jury verdict in favor of Trinity and Matrix. The appeals court found that the defendant employee was a user for the purposes of the products liability statute and remanded for a new trial on the strict liability claim. The appeals court did, however, affirm the trial court’s decision to instruct the jury on the sophisticated user defense on the negligence and breach of implied warranty of merchantability claims.
The remaining plaintiffs as well as Trinity and Matrix filed petitions for writs of certiorari, and the state supreme court granted both petitions. The state supreme court found that the employee had relied on the product labeling in determining whether to move the pallets before beginning his work, and he was therefore a user under South Carolina law. The court noted that “users” were not limited to those who were hurt while handling or operating the product, but a bystander employee cannot recover under strict liability. The court held that whether a particular injury victim is a “user” under South Carolina law is to be determined on a case-by-case basis.
The supreme court held that the sophisticated user defense was not applicable in this case. Although the court acknowledged that the employer here was well aware of the dangers of sodium bromate, that knowledge is not a defense to a claim that the labeling was inadequate. As stated by the court, “knowledge of sodium bromate’s inherent qualities are useless to a person who comes into contact with the chemical but cannot identify it.” The employees had testified as to their training and use of hazard labels. Here, the visibility of the hazard labels was the real issue in the case, and the evidence related to the employer’s status as a sophisticated user was “merely a distraction” from that issue. The supreme court found that the trial court had abused its discretion in instructing the jury on the sophisticated user defense, and it reversed and remanded for a new trial on the issues of negligence and the implied warranty of merchantability.
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