In Webb v Special Electric Company, Inc., the Supreme Court unanimously adopted the sophisticated intermediary doctrine in California, and then split 5-2 on how it should be applied. Webb was injured by exposure to products containing asbestos and sued the raw asbestos supplier – raising the question of what duty the raw material supplier had to warn the end user of a finished product. As with any seller of a product, a raw material supplier has a duty to warn about product risks that are known or knowable in light of available medical and scientific knowledge. But, by what means can the supplier discharge its duty?
The Supreme Court discussed the sophisticated intermediary doctrine in this context as an intersection between the sophisticated user defense (when the end user is already aware of the risk, or should be), the component parts doctrine (a component manufacturer is only potentially liable for the risk created by its component in the finished product), and the bulk supplier doctrine (noting circumstances in which a bulk supplier has no duty of care regarding the finished product). Furthering the policy goals of these doctrines, the Supreme Court adopted the sophisticated intermediary doctrine, as described by the Restatement Third of Torts, Products Liability, as an affirmative defense.
“Under this rule, a supplier may discharge its duty to warn end users about known or knowable risks in the use of its product if it: (1) provides adequate warnings to the product’s immediate purchaser, or sells to a sophisticated purchaser that it knows is aware or should be aware of the specific danger, and (2) reasonably relies on the purchaser to convey appropriate warnings to downstream users who will encounter the product.” These will all typically be questions of fact on which the supplier will have the burden of proof.
The court split 5-2 on the first prong, with the dissenters (the Chief Justice and Justice Chin) concluding that the raw material supplier should be required to show that it provided actual warnings or that the intermediate buyer is actually aware of the dangers. The dissenters were concerned that the rule as expressed created a loophole which could result in no actual warnings, but just the “reasonable belief” that they would be provided by someone else. In discussing the second element, the Supreme Court cited the Restatement regarding three factors for consideration of reasonable reliance: (1) the gravity of the risks posed by the product, (2) the likelihood that the intermediary will convey the information to the ultimate user, and (3) the feasibility and effectiveness of giving a warning directly to the user. Noting that there is little functional difference between a failure to warn claim in strict liability or in negligence, the Supreme Court confirmed that the sophisticated intermediary doctrine applies to both.
In this case, the Supreme Court found that record simply did not support the sophisticated intermediary doctrine, and that the defendant failed to argue this issue to the jury, or request jury instructions or a verdict form that addressed this issue. Thus, the unanimous Court affirmed the jury verdict for plaintiff.