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INSURANCE NOTES

Insurers May Benefit From "Sophisticated User" Defense

12.01.2005
Last month the California Court of Appeal issued a ruling that may significantly reduce exposure for product liability insurers. In Johnson v. American Standard, Inc. (October 17, 2005) 133 Cal.App.4th 496, the court ruled that the "sophisticated user" doctrine is part of California law. This doctrine holds that, "there need be no warning to one in a particular trade or profession against a danger generally known to that trade or profession."

In the American Standard action, the plaintiff was a certified HVAC technician who sued various product manufacturers and alleged that he was injured by phosgene gas that was created when he was welding as a part of the repair of commercial air conditioning systems. The defendants argued that they did not have a duty to warn plaintiff of the danger of this gas because this risk is within the professional knowledge of HVAC repairers.

Previously, no California court had stated in a published opinion whether there was a duty to warn a sophisticated user of these types of risks. The American Standard court noted that the courts in several other states had adopted the sophisticated user doctrine and held that "there is ordinarily no duty to give warning to members of a profession against generally known risks." In adopting this doctrine, the American Standard court ruled that it is a natural outgrowth of the rule that there is no duty to warn of obvious dangers. The court raised the rhetorical question of whether the potential danger of slingshots is generally known? The court's answer was that, "ever since David slew Goliath, young and old alike have known that slingshots can be dangerous and deadly." The court concluded that a certified HVAC technician would be reasonably expected to know that when a refrigerant is heated by welding, it can decompose into toxic byproducts, including phosgene. Thus, the court affirmed the trial court's decision granting summary judgment for the product manufacturers.

The adoption of the sophisticated user doctrine may limit the exposure of California product manufacturers and their liability insurers in cases where workers routinely are exposed to harmful chemicals. This may be particularly true in cases involving repeated exposure to hazardous materials over a period of years. The insurance coverage issues that such "continuous injury" cases raise may, including the application of pollution exclusions, become more manageable as insurers (and insureds) now advance the sophisticated user defense. Indeed, this may be a particularly useful defense in cases in which otherwise the strongest liability theory may that there was a flaw in the producer's warning labels or notices.

 

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